Are foster care alternatives paid?

Payment for a foster care alternative depends on the type of arrangement, the legal status of the child and the organisation responsible for making the placement. Some arrangements include regular financial support, while others may be unpaid or may provide help only in particular circumstances. The written agreement should explain exactly what is payable, who receives it and what the payment is intended to cover.

It is important to distinguish between an allowance and a fee. An allowance is normally intended to contribute towards the everyday costs of caring for a child, such as food, clothing, travel, activities and personal items. A fee, where one applies, is separate recognition of the carer’s time, skills and responsibilities. Not every arrangement includes both, and some include neither as a standard payment.

Different alternatives can have different financial arrangements:

• Kinship care: relatives or connected people may receive financial assistance, but the position can differ according to whether the arrangement is informal, supported by children’s services, or based on a formal court order.
• Special guardianship: a special guardian may be able to receive an allowance following an assessment of their circumstances and the child’s needs. This is not automatically the same as a fostering allowance.
• Short-break or respite care: carers may receive an allowance or fee for the agreed periods of care, depending on the scheme and the level of responsibility involved.
• Supported lodgings: hosts may receive payment for providing accommodation and practical support to a young person, although arrangements vary between providers.
• Adoption: adoption is not generally paid in the same way as fostering. Adoption support, including possible financial assistance, is considered separately and may depend on the child’s needs and the adopter’s circumstances.

For approved foster carers, financial support is usually linked to each placement rather than being a conventional salary. The amount can be affected by the child’s age, needs and circumstances, the type of placement and the provider’s payment structure. Additional payments may apply for particular responsibilities, specialist skills, significant travel or agreed expenses, but these should never be assumed without checking the provider’s current terms.

Payments may also change when a placement ends, when a child’s needs change or when the carer takes on a different type of placement. Ask whether there is any payment between placements, during planned breaks, for introductions or meetings before a placement starts, and for expenses such as mileage, equipment, holidays or activities. These details can make a substantial difference to how the arrangement works in practice.

Financial support should not be confused with reimbursement of expenses. A provider may pay an allowance for the child’s general needs and deal with specific costs through a separate expenses policy. Keep receipts and records where required, and establish in advance whether an expense needs approval before it is incurred.

The tax and benefits position can vary. Foster carers may be able to use special tax arrangements, but the treatment depends on the type of care, the income received and the applicable rules. Payments connected with kinship care, special guardianship, supported lodgings or another arrangement may be treated differently. Obtain current guidance from the relevant provider, HM Revenue and Customs, or a suitably qualified adviser rather than relying on assumptions about take-home income.

Before applying or agreeing to an arrangement, ask for a written breakdown covering:

• the basic allowance, fee or other payment;
• when payments begin and end;
• how the amount is reviewed;
• what happens if a placement is cancelled or ends unexpectedly;
• which costs are included and which can be claimed separately;
• whether training, meetings, appointments and travel are paid or reimbursed;
• how payments may affect tax, benefits or other household income; and
• who to contact if an agreed payment or expense is missing.

The financial arrangement is only one part of deciding whether an alternative to fostering is suitable. The assessment should also consider the child’s needs, the responsibilities involved, the effect on the household and the support available. Treat any payment as support towards the role, not as a guaranteed wage or a substitute for understanding the commitment required.