What expenses can foster carers claim?

Foster carers do not usually claim every household cost separately. Instead, the fostering service normally provides a fostering allowance intended to contribute towards the ordinary costs of caring for a child, with additional payments or agreed reimbursement considered where a cost is unusual, substantial or directly linked to the child’s assessed needs.

Costs commonly considered within fostering payments

The exact policy differs between fostering services, but an allowance may be intended to help with costs such as:

• food and additional household supplies;
• toiletries, personal-care items and other everyday essentials;
• school-related costs, including clothing, bags, materials and contributions where these are not provided elsewhere;
• pocket money and money needed for age-appropriate social activities;
• birthdays, cultural or religious celebrations and other important occasions;
• telephone or data use where this is necessary for the child’s safety, education or contact arrangements; and
• additional household running costs that arise because a child is living with you.

These costs may not be paid as separate reimbursements. They are often expected to be managed from the regular allowance, so it is important to understand what the allowance is designed to cover before accepting a placement.

When can a separate expense be agreed?

A fostering service may consider a separate payment where an expense is outside the normal day-to-day budget. Examples can include a significant one-off purchase, a specialist item recommended for a child, costs associated with a particular activity or arrangement, or expenditure arising from a child’s disability, health needs or education plan.

Approval is often required before committing to this type of cost. The service may ask why the item is needed, whether a less expensive option is suitable, and whether another organisation should meet the cost. A social worker, supervising social worker or other member of the fostering team should be able to explain the approval route.

Do not assume that an expense will be repaid

Foster carers should check the written payment policy before buying anything that is expensive, unusual or intended specifically for a placement. An item being beneficial to a child does not automatically mean it will be reimbursed. Some costs may be the responsibility of the local authority, school, health service, parent or another funding arrangement rather than the fostering service.

Ask for a clear answer about:

• whether the cost is included in the fostering allowance;
• whether prior approval is needed;
• who must authorise it;
• whether there is a spending limit or preferred supplier;
• what evidence must be provided; and
• when and how an approved reimbursement will be paid.

Written confirmation is preferable, particularly where the expense is significant or the child’s placement may change.

Keep accurate records

Keep receipts, invoices and other records for costs that you are asking the fostering service to consider. A simple record can include the date, item, amount, reason for the purchase, placement concerned and whether approval was obtained. For shared household costs, note how you calculated the part connected with fostering.

Records can help resolve questions about a payment and make it easier to review whether the allowance is meeting the child’s needs. They may also be useful when discussing changing needs with the child’s social worker or your supervising social worker. Follow the service’s rules on storing receipts and protecting confidential information.

Costs before and between placements

Expenses incurred during assessment, training or preparation are dealt with according to the fostering service’s policy. Some services may have a process for considering approved travel or other necessary costs, while others may treat them differently. Do not rely on the regular fostering allowance for costs incurred before a child is placed unless the service has confirmed this in writing.

Similarly, ordinary household expenditure does not automatically become claimable when there is no child living with you. Payments between placements and any associated expenses are separate questions and depend on the terms of your fostering agreement.

How tax fits in

Reimbursement from a fostering service and tax relief are not the same thing. A cost may be considered under the fostering service’s payment policy without being a separate tax deduction, and an expense that is not reimbursed does not automatically qualify for tax relief.

Foster carers may be covered by the qualifying care relief rules, which use a specific method for calculating the taxable profit from fostering. The details depend on your circumstances and the tax rules in force, so keep appropriate records and obtain guidance from HM Revenue and Customs or a suitably qualified tax adviser if you are unsure. Do not deduct fostering-related costs from other income without checking the correct treatment first.

What to check before applying to foster

Ask the fostering service for its current allowances and expenses policy and check whether it explains:

• which everyday costs the allowance is expected to cover;
• how exceptional or specialist expenditure is assessed;
• the process for requesting approval;
• the records and receipts required;
• how costs connected with education, health, contact and activities are handled; and
• how to challenge or review a decision if a child’s needs change.

The most useful comparison is not simply the size of the allowance. Consider what it covers, which costs can be agreed separately, and how clearly the service explains the process. A full discussion before approval can help you budget realistically and avoid committing to expenditure that has not been authorised.