How are foster carer allowance rates agreed?

Foster carer allowance rates are agreed through a provider’s financial framework, using the relevant government requirements, the costs of caring for a child and the type of placement being considered. In practice, the amount is normally set by the fostering service or local authority and explained to applicants before approval, alongside any separate fee or additional payments.

In England, fostering services must take account of the applicable national minimum allowance requirements. These provide a baseline for the everyday costs of caring for a child, although a provider may offer more than the minimum. Scotland, Wales and Northern Ireland have their own arrangements, so the rules can differ depending on where the fostering service is based.

When setting its rates, a provider will usually consider:

• the child’s age and the ordinary costs associated with that age group;
• food, clothing, personal items, household costs and travel;
• school-related expenses, activities and equipment;
• whether the placement is short-term, long-term, emergency, respite or another type of arrangement;
• the level of supervision, preparation and support the placement is expected to require; and
• any additional costs identified in the child’s care plan.

The child’s assessed needs can affect the overall financial package, particularly where a placement involves specialist care, significant travel, therapeutic support or other exceptional costs. These payments are not necessarily part of the standard weekly allowance. A provider should explain which costs are included in the basic rate and which may be considered separately.

It is also important to distinguish between an allowance and a fostering fee . The allowance is intended to contribute towards the costs of caring for the child. A fee, where offered, recognises the foster carer’s time, skills and responsibilities. Some services combine payments in one figure, while others show the allowance and fee separately. The payment schedule should make this clear.

Rates are normally recorded in the provider’s fostering policies, handbook, carer agreement or financial terms. These documents may explain:

• the standard rate for different age groups or placement types;
• how payments are calculated and made;
• what expenses can be claimed in addition to the regular allowance;
• how agreed payments are handled during changes in a placement; and
• when rates and policies are reviewed.

Before applying, prospective foster carers should ask for the current payment information and check whether it reflects the type of fostering they are considering. Useful questions include whether the quoted amount is a total or a breakdown, whether specialist or emergency placements attract different terms, how birthdays or changes in needs are dealt with, and which expenses require prior agreement or receipts.

A foster carer’s household income and expenditure may be assessed during the application process to confirm that fostering is financially realistic. This assessment is separate from deciding the published allowance rate. Foster carers should not be expected to rely on the allowance to meet unrelated household costs, and they should understand the likely financial effect of fostering before making a commitment.

Rates can be reviewed when government requirements change, when the provider updates its financial policy or when the circumstances of a placement change. Any proposed change should be explained through the relevant agreement or policy process. If a payment is unclear, the supervising social worker or fostering service should be able to confirm what it covers and whether other support is available.

For an accurate comparison, look beyond the headline weekly amount. Check the allowance, any fee, additional expenses, training-related payments and the terms that apply between or during placements. The written financial information is the best basis for understanding what a fostering service is offering and how its rates have been agreed.