What financial support do foster carers receive?

Foster carers receive a fostering allowance, with some arrangements also including additional payments and reimbursement for agreed costs. The total support depends on the fostering service, the type of placement, the child’s age and needs, and the skills or experience required from the carer.

The allowance is intended to contribute towards the everyday costs of caring for a child. It may help cover items such as:

• food and household essentials
• clothing, shoes and personal items
• travel connected with school, contact arrangements and activities
• bedroom and household costs
• leisure activities, hobbies and days out
• birthday and seasonal expenses

The allowance is not normally treated as a wage or salary. It is provided to support the child’s care and should be used in line with the fostering service’s guidance. Your supervising social worker can explain what the allowance is expected to cover and how to manage costs appropriately.

Additional fostering payments

Some foster carers receive payments in addition to the basic allowance. These may be linked to the type of fostering they provide, the complexity of a child’s needs, the length or circumstances of a placement, or the carer’s qualifications and experience. For example, a fostering service may have different payment arrangements for specialist, therapeutic, parent-and-child or other types of placement.

Additional payments are not automatic and are not necessarily available for every placement. Ask the fostering service to explain:

• which elements make up the payment
• whether payments vary between placement types
• how payments change when a child’s needs change
• what happens during planned breaks, unplanned endings or gaps between placements
• whether any payments are made directly to the child for personal spending

Costs that may be paid separately

Some costs are covered within the regular allowance, while others may be reimbursed separately if they have been agreed in advance. Possible examples include essential equipment, adaptations, travel for contact, school-related requirements, activities or clothing for a particular occasion. The rules differ between fostering services, so keep receipts where required and check the approval process before committing to significant expenditure.

A child may also have money set aside for personal spending or particular activities. This is separate from the foster carer’s own income and should be managed according to the fostering service’s policies and the child’s age and circumstances.

Tax and benefits

Fostering income has special tax rules. Foster carers are generally treated as self-employed for tax purposes and may be able to use qualifying care relief, which can reduce the amount of fostering income counted for tax. The calculation depends on the relevant tax rules and the carer’s circumstances, so it is sensible to obtain current guidance from HM Revenue & Customs or a qualified adviser rather than relying on an old allowance figure.

Fostering payments can also interact with means-tested benefits and other household income. The effect depends on the benefit, the people in the household, other earnings, savings and the nature of the fostering payments. Foster carers should check their position with the relevant benefits service before applying or when their circumstances change. Do not assume that fostering payments will be treated in the same way as ordinary employment income for every benefit.

Foster carers should also ask whether they can claim or continue receiving support such as Universal Credit, housing-related help or other benefits. Some benefits connected with being responsible for a child may have separate rules for foster children, so the fostering service or an independent benefits adviser can help clarify what applies.

What happens between placements?

Payment arrangements during periods when no child is placed vary between fostering services and approval types. Some schemes may provide a retainer or other payment in particular circumstances, while others only pay when a child is living with the carer. This should be confirmed before approval, because it can affect household budgeting and decisions about employment.

Likewise, payments may be affected if a placement ends unexpectedly, if a child takes an agreed short break, or if a carer is temporarily unable to accept a placement. Ask for the policy in writing so you understand how each situation is handled.

Questions to ask before applying

• What is the standard allowance and what costs is it intended to cover?
• Are there additional payments for particular placement types or levels of need?
• Which expenses can be claimed separately, and what evidence is required?
• How are payments made and what happens if a placement changes?
• Is there any financial support between placements?
• How might fostering affect my tax position or household benefits?
• Who can provide help with budgeting, tax and benefits advice?

Financial support is one part of the fostering framework. Before approval, applicants should consider whether their household budget could manage costs that fall outside the regular payment, as well as how fostering might affect work, benefits and other commitments. A fostering service should provide a clear breakdown of its payment structure so applicants can make an informed decision.