How do fostering agency allowance rates compare with council rates?

There is no single standard difference between fostering agency allowance rates and council rates. Each local authority and independent fostering agency sets its own payment structure, so the amount offered can depend on the child’s age and needs, the type of placement, the carer’s skills and experience, and any additional responsibilities involved. A meaningful comparison must look at how the payment is made and what it is intended to cover.

A council’s payment will usually include an allowance to meet the everyday costs of caring for a child, such as food, clothing, travel, activities and personal items. Some councils also operate fee-paying or skills-based schemes, where approved foster carers receive an additional payment linked to their experience, training, role or the complexity of a placement. Others may use a different structure, so the council’s published fostering allowance policy should be checked carefully.

With an agency, the payment may be divided into separate elements. One part is generally intended to cover the child’s maintenance costs, while another may be a professional fee for the foster carer. The fee may reflect the carer’s role, approval category, training, experience or the demands of a particular placement. However, not every agency uses the same terminology or offers the same elements, so ask the agency to explain its payment schedule rather than relying on the headline rate.

The child’s individual circumstances can affect payments from either type of provider. A placement involving significant health needs, challenging behaviour, multiple children, specialist equipment, frequent appointments or extensive travel may attract additional financial arrangements. These should be confirmed before accepting the placement, including whether extra costs are paid through the regular allowance, reimbursed separately or agreed on a case-by-case basis.

Foster carers should also establish whether payments continue during specific periods, such as planned holidays, introductions, respite, temporary absences or an unplanned ending to a placement. Policies can differ on payments between placements, and an allowance linked to a particular child may not automatically continue when that placement ends. The written terms should explain the conditions that apply.

Money is only one part of the comparison. Ask both a council and an agency about:

• the basic allowance and the costs it is expected to cover;
• any separate professional fee and how eligibility for it is assessed;
• additional payments for sibling groups, parent-and-child placements or more complex care;
• who pays for essential equipment, clothing, activities, transport and training;
• how payments are handled when a child’s needs change;
• whether there are arrangements between placements; and
• how payment queries, overpayments and changes to the policy are managed.

Support can also affect the practical value of an allowance. Both councils and agencies should provide preparation and assessment before approval, and foster carers should have access to training, supervision and support after a child is placed. The exact arrangements vary: one provider may offer more structured specialist support, while another may have different local services or routes to additional help. This should not be treated as a substitute for payment, but it is relevant when considering the responsibilities attached to a placement.

Tax should be considered separately from the rate itself. Foster carers may qualify for specialist tax treatment under the government’s qualifying care relief rules, but the outcome depends on the individual’s circumstances and the nature of their fostering income. A council or agency can explain how it records payments, but it cannot determine a carer’s personal tax position. Independent advice from HM Revenue and Customs or a qualified adviser may be appropriate.

When comparing offers, request a current written breakdown and ask for examples of how it would apply to the types of placement you are likely to consider. Check whether quoted figures are weekly, per child or per placement, whether they include a fee, and whether any deductions or conditions apply. The highest advertised rate is not necessarily the most useful arrangement if it excludes expenses that another provider pays separately.

In practice, the better comparison is the clarity and reliability of the payment structure alongside the training, supervision, practical assistance and terms attached to it. Read the allowance policy before applying or accepting a placement, and ask for any verbal explanation to be confirmed in writing.