What financial support do foster carers receive?

Financial support for foster carers is usually made up of regular payments linked to an approved placement, with any extra amounts agreed according to the child’s needs and the type of care being provided. The purpose is to help meet the costs of caring for a child and to recognise the responsibilities involved; it is not normally treated as a conventional salary.

What the payments are intended to cover

A fostering payment may contribute towards everyday costs such as food, clothing, toiletries, household bills, transport and activities. The amount needed can vary depending on the child’s age, circumstances and requirements. Some placements may involve additional agreed payments where a child needs more specialist care, equipment, travel or support.

Payments are generally discussed as part of the approval and placement process. Before accepting a placement, ask for a clear breakdown of:

• the standard fostering payment and what it is designed to cover;
• any additional payment connected with the child’s needs or placement type;
• how and when payments are made;
• which expenses can be claimed separately;
• whether agreed costs need prior approval or supporting receipts; and
• what happens to payments when a placement ends, changes or is temporarily paused.

Allowances and expenses are not always the same

An allowance is usually intended to cover the routine costs of caring for a child. Expenses may be dealt with separately, particularly where there are exceptional travel requirements, education-related costs, introductions, meetings or items that are not reasonably expected to come from the regular payment. The exact rules depend on the fostering service, so written guidance is more reliable than assuming every cost is covered in the same way.

It is sensible to keep records of placement-related spending and to retain receipts where required. This helps you understand the real cost of fostering and gives you the information needed if you need to discuss an expense with your supervising social worker or fostering service.

How fostering payments interact with tax

Foster carers usually have specific tax arrangements because they are treated as self-employed for tax purposes. The qualifying care relief scheme can reduce the amount of fostering income on which tax is calculated, subject to the relevant rules and eligibility requirements. The treatment can depend on the household’s circumstances, the number of placements and the type of care provided, so prospective carers should check current guidance with HM Revenue & Customs or an appropriately qualified adviser.

Fostering payments may also affect an individual’s wider financial position, including means-tested benefits, pension planning, mortgage applications or decisions about other employment. This does not mean that receiving benefits or having a job automatically prevents someone from fostering. It does mean that the potential impact should be considered before applying and reviewed when circumstances change.

Financial planning before applying

Fostering payments are intended to support the cost of caring for a child, rather than to replace a household’s entire income in every situation. Consider your regular outgoings, existing commitments, transport costs, time away from other work and the possibility that payments may vary when there is no child placed with you. A realistic household budget can help you assess whether fostering is financially manageable.

During the assessment, your fostering service will consider your financial circumstances as part of the wider suitability assessment. This is not simply about how much money you earn. The focus is whether your household can provide stable care without relying on fostering payments to meet unavoidable debts or essential living costs. Be open about your circumstances and ask for clarification about payment arrangements before making an application or accepting a placement.

Become a Foster Family can explain the payment structure that applies to its fostering service, including the distinction between regular fostering payments and approved additional expenses. Ask for the current written information so that your decision is based on the arrangements relevant to your prospective placement, rather than on general figures found elsewhere.