How much does it cost to foster a child?

The cost of fostering a child depends on the child’s needs, the type of placement and your household circumstances. Foster carers normally receive a fostering allowance, and some arrangements also include a professional fee or other financial support. These payments are intended to contribute towards the costs of caring for the child, but they are not the same as a guaranteed salary and should not be treated as an unlimited household income.

What you may receive

A fostering agency should explain its payment structure before you apply. This should set out the basic allowance, when additional payments may apply, and whether the arrangement includes a fee for your role as a foster carer. The amount can vary according to factors such as:

• the child’s age and day-to-day needs;
• whether the placement is short term, long term, respite or an emergency arrangement;
• whether siblings are placed together;
• whether the child has additional health, educational or emotional needs; and
• the level of supervision, transport or practical support required.

Payments may also differ between fostering agencies and local authorities. Before making a decision, ask for a current written explanation of the allowance, any fee, payment dates, deductions and circumstances in which additional funding may be available.

What the allowance is intended to pay for

The allowance is generally used for the everyday costs of looking after a child. Depending on the agency’s policy, this may include food, clothing, toiletries, household bills, transport, school-related items, activities, celebrations and personal spending money. It may also contribute towards the extra use of your home, vehicle and other resources.

Not every expense will be paid separately. Some agencies provide additional budgets or reimbursements for particular items, while others expect certain costs to be met from the regular allowance. Keep receipts where your agency requires them and check the rules before committing to a significant purchase.

Possible costs before and between placements

Fostering may involve preparing your home and finances before a child is placed. Potential costs can include furnishing or equipping a bedroom, replacing unsuitable safety items, buying clothing or equipment, arranging transport, and checking whether your home and vehicle insurance remain suitable. These expenses are not automatically covered, so ask what is essential, what can be supplied or reimbursed, and what you can purchase after approval.

There may also be household costs between placements, such as keeping a bedroom available, maintaining equipment or meeting insurance and vehicle expenses. The payment arrangements for these periods vary, so they should form part of your financial planning rather than being assumed to continue unchanged.

Is fostering a wage?

Fostering payments are usually made to support the child’s care and recognise the responsibility involved. Their structure is different from ordinary employment income. You may not receive the same amount for every placement, and payment can depend on the child’s circumstances and the terms of your fostering agreement.

Tax treatment can also be different from standard employment. Foster carers may be able to use a specific tax relief scheme for qualifying care, but the rules depend on the type of fostering arrangement and your wider financial position. Benefits, pension contributions and other household income can also be affected by your circumstances. Take independent tax or benefits advice and do not rely on a general estimate when preparing your budget.

How to work out your likely position

• List your current essential household spending, including rent or mortgage, utilities, food, travel, insurance and debt commitments.
• Estimate the additional costs of caring for a child, including meals, clothing, school items, activities and transport.
• Separate regular costs from occasional expenses such as holidays, birthdays, furniture and equipment.
• Ask the agency which items are included in the allowance and which may be paid separately.
• Check whether payments change during respite, planned breaks, unplanned endings or gaps between placements.
• Allow for costs that may arise before reimbursement, and keep a sensible emergency reserve where possible.

A fostering assessment includes discussion of your finances. You do not need to be wealthy, but you should be able to manage your existing commitments without relying on uncertain fostering payments to cover essential bills. The agency will need to understand your income, outgoings, debts, accommodation and any changes that a placement could create.

What to ask before applying

• What payments are available for the types of placement being considered?
• Does the payment include both the child’s allowance and a carer fee, or are these separate?
• Which costs require prior approval?
• Are school trips, activities, clothing, travel or specialist equipment funded separately?
• What happens financially if a placement ends earlier than expected?
• How are payments treated for tax and benefits purposes?
• What records, receipts or forms must foster carers keep?

There is no universal total cost that applies to every foster carer. A realistic answer comes from comparing your household budget with the agency’s current payment policy and the likely needs of the children you may care for. A fostering agency should give you clear financial information during the enquiry and assessment process, so you can decide whether fostering is affordable for your circumstances before approval.