Are foster carer payments separate from a child’s personal allowances?

Foster carer payments and a child’s personal allowances are normally treated as separate parts of the fostering budget. The payment to the foster carer is made under the fostering arrangement, while a personal allowance is money allocated for the child’s own use or individual needs. They should therefore be recorded and managed separately, even where both amounts are paid through the same fostering service.

Foster carer payments are intended to recognise the costs and responsibilities involved in caring for a child. Depending on the fostering provider and the placement, this may include an allowance for everyday household expenses and a separate fee for the carer’s role, experience or responsibilities. The exact structure, amount and payment arrangements should be explained before approval and set out in the fostering provider’s policies or agreement.

A child’s personal allowance is intended for expenses or spending that relate specifically to that child. This could include age-appropriate pocket money, personal toiletries, activities, small purchases or other agreed items. The amount and how it is provided will depend on the child’s age, care plan, local arrangements and individual needs. A younger child’s money may need to be held or managed by the foster carer, whereas an older child may take greater responsibility for it.

Personal allowances are not an additional fee for the foster carer. They should not be treated as household income or used to replace the foster carer’s agreed payment. If the allowance is paid to the carer to manage on the child’s behalf, the carer may need to keep appropriate records and be able to show how it has been used. Some arrangements may also involve saving part of a child’s money or retaining receipts for particular purchases.

The distinction matters because foster children should be able to understand how money intended for them is managed. Foster carers should discuss expectations with the child in an age-appropriate way, take account of their wishes and cultural or personal needs, and follow the provider’s guidance. Decisions about pocket money, clothing, gifts, savings and larger purchases should be consistent and fair, while still allowing for differences in age, circumstances and need.

There can be other payments connected with a placement, such as money for approved activities, school-related costs, clothing or exceptional items. These are not automatically the same as a child’s personal allowance. Whether they are included in the main fostering payment, claimed separately or agreed in advance depends on the fostering provider and the child’s care arrangements.

Before accepting a placement, ask the fostering service to explain:

• which part of the payment is for the foster carer and which money belongs to the child;
• how personal allowances are calculated and provided;
• whether the carer must keep records, receipts or savings records;
• how larger or unexpected expenses are authorised;
• what happens to unused money at the end of a placement; and
• who to contact if the child’s needs change.

The written fostering agreement and the child’s placement information should provide the working details for an individual placement. If the payment breakdown is unclear, a prospective or approved foster carer should ask their fostering service or supervising social worker for clarification rather than assuming that a child’s personal allowance is included in, or deducted from, the carer’s agreed payment.