Are fostering allowances separate from fees paid for a foster carer’s role?

In practice, fostering allowances and foster carer fees may be calculated separately even when they appear together as one total payment. The allowance is linked to the cost of caring for the child, whereas the fee reflects the foster carer’s role, responsibility, experience and skills. The exact structure depends on the fostering service, the type of placement and the terms agreed before approval.

What the fostering allowance is intended to cover

An allowance is provided to contribute towards the everyday costs of looking after a child. Depending on the fostering service’s policy, this can include items such as:

• food and household costs;
• clothing, shoes and personal items;
• school-related costs and activities;
• birthdays, celebrations and pocket money arrangements; and
• other regular costs associated with the child’s care.

The allowance is not normally treated as a wage for the carer’s work. Its purpose is to help meet the child’s needs and maintain an appropriate standard of care. The amount may vary according to factors such as the child’s age, the placement requirements and whether additional costs have been identified.

What the foster carer fee is intended to cover

A foster carer fee, where one is offered, recognises the carer’s contribution in undertaking the fostering role. Fostering involves responsibilities beyond providing accommodation. Carers may need to attend training, meetings and reviews, keep records, work with social workers and other professionals, support contact arrangements, and help the child manage changes in their circumstances.

The fee may therefore be linked to the carer’s approval, skills, experience or the level of responsibility involved in a particular placement. Some fostering services use different fee levels for different types of placement. Others may have a standard fee structure or combine the fee and allowance into one payment rather than showing two separate figures.

Why the payment can look different between fostering services

There is no single payment format used by every fostering provider. A service may:

• show the allowance and fee as separate lines;
• advertise one total weekly payment that contains both elements;
• offer additional payments for specific placement needs; or
• use different arrangements for local authority, agency, parent-and-child, respite or specialist placements.

A higher total does not necessarily mean that the allowance itself is higher. It may include a larger fee, an enhanced amount for the placement, or reimbursement for an agreed additional cost. The written payment information should explain what each element represents.

When a placement has additional requirements

If a child has needs that require greater supervision, specialist equipment, additional travel or a more intensive care plan, the fostering service should explain how those needs affect payments. This could involve an enhanced allowance, a higher fee, separate reimbursement or another agreed arrangement. These payments should not be assumed to apply automatically: they depend on the child’s assessed needs and the provider’s policy.

It is also important to distinguish between a regular allowance or fee and a repayment of an expense. For example, an agreed cost connected with a child’s care may be dealt with separately from the normal fostering payment. The fostering service should clarify which costs are included in the usual allowance and which need prior agreement.

Questions to ask before applying or accepting a placement

Prospective foster carers should request a current payment guide and ask:

• Are the allowance and foster carer fee shown separately?
• What costs is the allowance expected to cover?
• How is the fee determined, and does it depend on approval level, experience or placement type?
• Are enhanced payments available when a child has more complex needs?
• Which expenses are reimbursed separately, and what evidence or approval is required?
• Are payments made only while a child is placed, or are there arrangements between placements?
• How and when are payments reviewed if the child’s circumstances change?

The provider should also explain how payments are recorded and whether the carer’s individual tax position could be affected. Foster carers should not assume that the allowance and fee have identical tax treatment. Tax rules and individual circumstances vary, so specific tax questions may need to be discussed with HMRC or a qualified adviser.

The key point is to look beyond the headline total. A clear breakdown of the allowance, fee, enhancements and expenses will show what support is intended for the child’s day-to-day care and what payment recognises the foster carer’s professional responsibilities.