Are fostering payments paid directly to foster carers?

Fostering payments are generally transferred to the approved foster carer’s nominated bank account by the fostering service responsible for the placement. The service may be a local authority or an independent fostering organisation. The exact payment process is set out in its fostering agreement, payment policy and placement documentation, so arrangements can differ between providers.

The payment is usually made to the foster carer rather than to the child in placement. It is intended to help meet the costs of caring for the child or young person, including everyday items such as food, clothing, household expenses, travel and activities. Depending on the provider’s structure, the overall payment may include:

• an allowance towards the child’s day-to-day care and living costs;
• a professional fee or skills payment for the foster carer’s role and responsibilities;
• additional amounts for specific circumstances, such as specialist equipment, particular travel requirements or agreed activities; and
• reimbursement of approved expenses, where these are handled separately from the regular fostering payment.

Not every fostering service uses the same terminology or combines these elements in the same way. Some may describe the payment as a fostering allowance, while others may show an allowance and fee as separate entries. The important point is to establish what each part covers and whether it is paid automatically or must be agreed or claimed.

Before a placement begins, the fostering service should explain the financial arrangements and confirm the agreed payment for that placement. You should be given information about:

• the amount or rate that applies to the placement;
• when payments are normally made;
• which bank account will receive the money and how bank details are recorded or changed;
• how additional costs and agreed expenses are dealt with;
• what happens if the child’s needs or placement arrangements change; and
• how payments are adjusted when a placement ends.

Payments are commonly made electronically, but you should not assume that the same schedule applies everywhere. A provider may make payments weekly, fortnightly or monthly, depending on its policy and payroll or finance arrangements. The first payment may also follow a different process from later payments, particularly if checks or placement records need to be completed. Ask the fostering service to confirm the schedule in writing before relying on it for household budgeting.

Fostering payments should be distinguishable from ordinary employment wages. Foster carers are not usually employed in the same way as staff members simply because they receive an allowance or fee. The payment relates to the fostering role and the costs and responsibilities connected with caring for a child. Your individual tax position and any effect on benefits depend on your circumstances, so these should be checked separately with an appropriately qualified adviser or the relevant government service.

A foster carer should receive a clear record of payments. This may be a remittance advice, statement, payslip-style document or online record showing the placement, payment period, allowance or fee components, and any approved adjustments. Keep these records with receipts or expense information where required. They can help you check that the amount received matches the placement agreement and provide useful evidence for tax, benefits or financial administration.

If a payment does not arrive, appears incorrect or has been sent to the wrong account, contact the fostering service’s designated finance or fostering team. Keep a note of the placement dates, the payment period and the amount expected. The fostering service should be able to explain whether the issue relates to a processing date, a change in the placement, missing information or an adjustment under its policy.

When comparing fostering services, do not look only at the headline figure. Ask how much is paid directly to carers, what is included, whether fees and allowances are shown separately, how expenses are approved, and what financial support is available for the child’s particular needs. This gives a more accurate picture of how the fostering payment works in practice.

Become A Foster Family can explain the payment arrangements used by its fostering service and help applicants understand the financial information provided during assessment and preparation. It supports prospective and approved foster carers across the West Midlands, including Birmingham, Worcestershire, Staffordshire, Dudley, Sandwell, Herefordshire, Telford, Wolverhampton, Shropshire, Walsall, Warwickshire, Stoke, Solihull, Coventry and Gloucestershire.