What financial support do foster carers receive?

Financial support for foster carers usually consists of a regular fostering allowance, with additional payments or reimbursement arrangements depending on the child’s needs, the type of placement and the fostering agency’s policy. The purpose is to help meet the costs of caring for a child, rather than to act as a conventional salary. Before approval, you should receive a clear explanation of how payments are calculated and which expenses are covered.

What the fostering allowance is designed to cover

The main allowance is intended to contribute towards the everyday costs of looking after a child or young person. This may include:

• food and household costs;
• clothing, toiletries and personal items;
• school-related costs and activities;
• travel connected with the child’s care;
• leisure activities, hobbies and social opportunities; and
• a contribution towards the additional use of your home and household facilities.

The amount can be influenced by factors such as the child’s age, their individual needs, the complexity of the placement and the level of skill or experience required. Different agencies use different payment structures, so an allowance should not be assumed to be the same for every child or every fostering provider.

Fees and skills payments

Some fostering agencies separate the maintenance element from a fee or skills payment for the foster carer. Where this arrangement applies, the fee recognises the time, responsibility, training and expertise involved in fostering. It may be linked to the carer’s approval level, the type of placement or the additional support a child requires.

Not every agency uses the same terminology or offers the same structure. Ask whether the quoted payment includes only the child’s maintenance costs or also includes a fee for the foster carer. You should also establish whether the payment changes for placements involving teenagers, sibling groups, children with additional needs or more specialist care.

Additional expenses and one-off help

Some costs may be dealt with separately from the regular allowance. Depending on the agency and the circumstances, this can include essential equipment, initial clothing, travel for contact arrangements, education-related expenses, activities or other agreed items. You may need approval before committing to a larger expense, so check the procedure in advance.

Ask for the agency’s written policy on:

• what is included in the regular allowance;
• which expenses can be claimed separately;
• whether receipts are required;
• how mileage and other travel costs are handled;
• who pays for essential equipment or adaptations; and
• what happens when a child’s needs change during a placement.

Tax and benefits

Foster carers may receive specific tax treatment through the government’s qualifying care relief rules. These rules can reduce the amount of fostering income on which tax is calculated, but the position depends on the relevant tax year and your circumstances. The allowance should not automatically be treated in the same way as ordinary employment income. Keep accurate records and obtain current guidance from HMRC or a suitably qualified tax adviser.

Fostering payments can also interact with means-tested benefits, including support linked to household income or housing costs. The effect is not identical for every benefit or every household. If you receive benefits, ask for an individual assessment before making financial decisions, and report fostering income or payments as required by the relevant department.

Payments are not the same as a wage

Foster carers are generally not employees of the fostering agency. The allowance is connected to the care provided and the costs of the placement, rather than being a standard salary with employee benefits. It is therefore important to plan for variable household finances and to understand what happens if there is a change in placement arrangements.

Ask specifically whether payments continue between placements, during planned breaks or when a placement ends unexpectedly. These arrangements differ between agencies and may depend on the terms of your agreement, your approval and the circumstances involved.

Financial information provided during assessment

As part of the fostering assessment, you will normally discuss your household finances. This is not intended to require a particular income level; it helps establish whether your household can manage its existing commitments without relying on fostering payments to meet essential bills. You should be open about mortgages or rent, debts, regular expenses, childcare costs and any change in income that fostering could cause.

You may also need to consider practical costs before a placement begins, such as preparing a bedroom, arranging transport, attending training and making changes to family routines. Your assessing social worker should explain which costs are your responsibility and which may be covered by the agency.

Questions to ask before choosing an agency

• What is the basic allowance for the types of placements I am considering?
• Is there a separate fee or skills payment?
• Which costs are included, and which can be claimed in addition?
• How are payments affected by a child’s age, needs or number of children placed?
• When are payments made, and what records or receipts are needed?
• How should I account for the payments for tax and benefits purposes?
• What financial support is available for equipment, travel and agreed activities?
• What arrangements apply if a placement changes, pauses or ends?

Before you apply, the fostering team can explain the current payment structure, likely expenses and the records you will need to keep. Treat any figures as subject to review, since allowances, fees, tax rules and benefit rules can change. A written breakdown gives you a more accurate basis for deciding whether fostering is financially manageable for your household.