How are allowances managed in social services fostering?

Allowances in social services fostering are managed according to the local authority’s fostering policy, with the amount and payment arrangements linked to the child’s needs, age, placement type and the costs involved in their care. The allowance is separate from the child’s personal income or benefits and should be used for the day-to-day expenses of looking after them.

Before approval, you should be given information about how the allowance is calculated, when it is paid and which costs are included. Policies can differ between local authorities, so it is important to understand the specific arrangement that applies to you rather than relying on another foster carer’s experience.

Depending on the policy and the child’s circumstances, the allowance may contribute towards:

• food, household costs and personal care items;
• clothing, footwear and school requirements;
• travel to school, appointments, activities and family contact;
• clubs, hobbies, leisure activities and equipment;
• birthday and seasonal presents;
• pocket money and savings for the child; and
• other agreed costs arising from the placement.

Some expenses are expected to come from the regular allowance, while others may need prior approval or reimbursement separately. Larger or unusual costs can include specialist equipment, significant travel, adaptations, activities linked to the child’s care plan or items needed when a child first moves in. Keep receipts where required and ask before committing to a substantial expense, as retrospective payment may not be available.

The payment may be reviewed when a child’s circumstances change. For example, a different arrangement may apply if the child’s needs increase, the placement changes, the child reaches a different age band or additional support is agreed. The fostering service should explain any review process and tell you how changes are recorded.

Allowances should not be treated as a wage. Some fostering services may also have separate arrangements for fees, skills payments, specialist placements or other forms of recognition, but these are not automatic and should not be assumed to form part of the standard allowance. Ask for a written breakdown showing which elements relate to the child’s expenses and which, if any, relate to the carer’s role.

Good record-keeping makes allowance management easier. A simple monthly budget can separate regular household spending from child-specific costs, while a folder or digital record can hold receipts, mileage details and approval messages. You should also agree how to manage spending when a child moves in part-way through a payment period, during holidays, or when planned contact and transport create additional costs.

Tax treatment depends on the applicable fostering rules and your circumstances. Fostering households may qualify for specific tax arrangements, but tax thresholds and guidance can change. The fostering service can explain the information it provides, while HM Revenue and Customs or a suitably qualified adviser can clarify your individual position.

Questions worth asking before accepting a placement include:

• What is the current allowance for this child and what does it cover?
• Which costs require approval before they are incurred?
• How are travel, contact arrangements, activities and equipment paid for?
• How are pocket money, savings and presents managed?
• What happens to payments if the placement changes or ends?
• Who should be contacted if a cost is urgent or the allowance does not meet an identified need?

If the allowance does not appear to reflect the child’s assessed needs, raise this promptly with the fostering service and refer to the child’s care plan and placement agreement. Allowance discussions should be part of ongoing placement reviews, not something left until financial difficulties affect the care being provided.