How is the amount of fostering payment decided?

The amount a foster carer receives is calculated under the fostering service’s approved payment framework. That framework sets the basic allowance, explains when an additional fee may apply and identifies circumstances in which extra funding can be considered. The final figure is therefore determined by the service responsible for the placement, rather than by an individual carer negotiating a separate rate for each child.

When setting its rates, a fostering service normally considers the following:

• The cost of meeting everyday needs: the allowance is intended to contribute towards food, clothing, personal items, household costs, travel and activities connected with caring for a child.
• The child’s individual circumstances: a child who needs specialist equipment, particular transport arrangements, therapeutic input or additional activities may require funding beyond the standard amount.
• The type of placement: different arrangements, such as short-term, long-term, respite, emergency or parent-and-child placements, can have different payment rules because the responsibilities and practical demands are not the same.
• The level of care required: more complex arrangements may attract enhanced support where a child has significant emotional, behavioural, health or developmental needs.
• The carer’s role and experience: some services operate a fee structure that recognises training, skills, experience or approval for particular types of placement. This is separate from the allowance intended to meet the child’s expenses.

In England, fostering services must take account of the government’s minimum allowance requirements when setting their basic rates. A service may pay more than the minimum where its own financial framework allows this, particularly for specialist placements. Rates can therefore differ between local authorities and independent fostering agencies, even where the child’s age and placement type appear similar.

The payment is usually agreed as part of the placement planning process. Before a placement begins, the fostering service should explain the applicable rate, what it is intended to cover and whether any additional payments or expenses have been authorised. The child’s placement plan and the carer’s agreement should provide the practical details, including responsibilities, approved expenses and arrangements for reviewing the placement.

Additional amounts are not necessarily automatic. A service may require evidence of a specific expense, prior approval for an item or a decision from a placement or payments panel. For example, costs connected with specialist equipment, substantial travel or agreed activities may be considered separately from the regular fostering payment. Carers should check the rules before committing to significant expenditure, as reimbursement may depend on the service’s approval process.

Payments can also be reviewed if the circumstances of the placement change. A review may be appropriate when a child’s needs increase, the placement moves from short-term to long-term care, the carer takes on additional responsibilities or a different placement arrangement is agreed. Any change should be explained by the fostering service rather than assumed by the carer.

Prospective carers should ask for the current payment policy before applying or accepting a placement. Useful questions include:

• What is the standard allowance for the relevant placement type?
• Is there a separate professional fee, and how is it calculated?
• Which costs are included in the regular payment?
• Which expenses can be claimed separately, and what approval is needed?
• How are payments adjusted for specialist or higher-needs placements?
• When and how are rates reviewed?

A written breakdown makes it easier to understand the difference between money intended for the child’s care and any fee paid to recognise the foster carer’s role. It also helps applicants compare fostering services accurately, since a higher headline figure may include different elements from another service’s payment package.