What happens to private fostering payments when a placement ends?

After a private fostering arrangement ends, routine payments usually cease because the carer is no longer providing day-to-day care under that arrangement. The remaining financial work is normally to reconcile the final period of care, any agreed expenses and any amount already paid in advance.

Private fostering payments are not set at a single national rate. They are generally agreed between the child’s parent, person with parental responsibility and the private foster carer. This means the terms for the final payment should be taken from the written agreement, rather than assumed from arrangements used by local authority foster carers.

Several points should be checked when the placement ends:

• The final care period: establish the date on which the child stopped living with the carer, or the date on which responsibility for their daily care ended. The agreement may explain whether the final amount is calculated by reference to whole weeks, part-weeks or another method.
• Payments made in advance: if money has been paid for a period that was not completed, the agreement may require an adjustment or repayment. This should be discussed and recorded clearly rather than assumed.
• Outstanding expenses: keep receipts and details of costs incurred before the end date. Only expenses covered by the agreement, or separately authorised by the person responsible for payment, should be included in the final account.
• Notice arrangements: where the placement ended with notice, check whether the agreement provides for payment during that notice period. An unexpected move may be dealt with differently, particularly if the child’s safety or welfare required an immediate change.
• Changes to the arrangement: if the child remains in the home under a new arrangement, the existing payment terms should not automatically be treated as continuing. Confirm who is responsible for care and agree any new financial terms in writing.

A private fostering arrangement can end because the child returns to a parent, moves to another family member, moves to a different carer or reaches the point at which the arrangement no longer meets the legal definition of private fostering. A change in living arrangements does not necessarily resolve the financial account immediately, so keep a record of the end date, payments received, expenses claimed and any conversations about money.

The end of the arrangement should also be reported to the relevant local authority private fostering or children’s services team. Private fostering arrangements involve safeguarding responsibilities, and the council needs accurate information about where the child is living and who is caring for them. The council can also clarify what administrative steps are needed when a placement ends.

If the parent or another payer disputes the final amount, refer first to the written agreement and set out the calculation in writing. Avoid treating an allowance as an automatic entitlement after care has stopped, or withholding a legitimate payment without checking the agreed terms. Where the disagreement cannot be resolved, ask the local authority team or an appropriate independent adviser what help is available. Keep communication focused on the dates, care provided, agreed rate and supported expenses.

For people considering fostering more generally, it is important to distinguish private fostering from fostering arranged by a fostering service. The payment rules, approval process and responsible organisation can be different. Before accepting a private fostering arrangement, make sure the financial terms and arrangements for ending it are understood by everyone involved and are recorded clearly.