What allowance do independent foster carers receive?

An independent fostering allowance is usually made up of money intended to cover the child’s everyday needs, together with payment that recognises the foster carer’s professional responsibilities. It is not normally the same as a conventional salary, and the exact structure depends on the independent fostering agency’s policy and the terms agreed before approval.

What the allowance may cover

The maintenance element is intended to contribute towards the costs of caring for a child. Depending on the agency’s arrangements, this may include items such as:

• food and household bills;
• clothing, shoes and personal items;
• transport connected with school, contact and appointments;
• leisure activities, hobbies and outings;
• school-related costs and equipment; and
• personal allowances or savings for the child, where the agency requires these.

Some costs may be included in the regular payment, while others may be reimbursed separately or paid directly by the agency or placing authority. Do not assume that a larger weekly figure covers every expense: request a written explanation of what is included and what can be claimed in addition.

Why payments can differ

Agencies may use different allowance bands or payment structures. The amount offered can be affected by the child’s age, the number of children placed together, the type of placement and the level of care required. A placement involving complex needs, significant uncertainty or additional responsibilities may have different financial arrangements from a more straightforward placement.

There may also be separate arrangements for emergency placements, respite care, parent-and-child placements, staying-put arrangements or other specialist types of fostering. These terms should be explained before you agree to a placement rather than being inferred from the standard rate.

Allowance is not the same as reimbursement

It is useful to distinguish the regular fostering payment from expenses. An allowance is generally planned as part of the ongoing financial arrangement for the placement. Reimbursements are usually linked to particular costs, such as approved travel, specialist equipment, activities or damage resulting from circumstances beyond normal wear and tear.

Ask whether you need prior approval before spending money, which receipts must be kept and whether claims have limits. This can prevent confusion about costs that are the foster carer’s responsibility and those that the agency will consider separately.

Tax and financial records

Foster carers may benefit from special tax rules, including qualifying care relief, but the treatment depends on their circumstances and the type and amount of fostering income received. The allowance should not simply be treated as ordinary employment pay without checking the relevant rules. Keep payment statements, approved expense records and receipts, and obtain current guidance from HM Revenue & Customs or a suitably qualified tax adviser.

Tax treatment can change, and an agency’s explanation of its payment structure is not a substitute for individual tax advice. If you receive other income, claim benefits, or foster alongside employment or self-employment, ask how the fostering payments may affect your wider position.

Questions to ask before applying or accepting a placement

• What is the current payment structure, and which part is intended for the child’s expenses?
• Are payments made during introductions, planned respite or gaps between placements?
• What happens to the payment if a child is absent, moves temporarily or the placement ends?
• Which costs are included, and which can be claimed separately?
• Are there additional payments for siblings, specialist placements or extra agreed duties?
• When are payments made, and what conditions apply?
• What records and receipts must be kept?
• Will the agency provide the terms in writing before approval or before a placement begins?

Financial arrangements should be considered alongside the support, training, supervision and practical responsibilities involved in fostering. The allowance is designed to help meet the costs of caring for a child and recognise the role, but it should not be viewed as guaranteed profit or as payment for simply having an available bedroom. Read the agency’s current financial policy and individual placement agreement carefully, and raise any unclear point with the assessing or supervising social worker before making a decision.