What allowances are available in voluntary foster care?

Voluntary foster care allowances usually consist of a regular maintenance payment, with separate payments or agreed expenses for particular costs. The exact package is set by the fostering provider and can vary according to the child’s age, needs, placement arrangements and the provider’s current policy.

The main types of payment may include:

• Maintenance allowance: intended to meet the child’s everyday costs, such as food, household bills, personal care items, clothing and ordinary activities.
• Fostering fee or professional payment: some voluntary fostering organisations pay a fee in recognition of the carer’s time, skills and responsibilities. This may be separate from the child’s maintenance allowance, although not every provider uses the same structure.
• Additional-needs payments: a higher allowance or an agreed supplement may apply where a child has disabilities, complex health needs, behavioural needs or other requirements that create additional costs and responsibilities.
• Placement-related expenses: the provider may contribute towards agreed travel, equipment, activities, contact arrangements or other costs directly connected with the placement.
• Occasional payments: some schemes provide separate support for items or events such as clothing, birthdays, religious or cultural occasions, holidays, school requirements or essential equipment. These payments are not automatic everywhere, so they should be confirmed before a placement begins.

Allowances are normally intended for the child’s care rather than being treated as an unrestricted wage. You may need to budget for the child’s regular expenses from the maintenance payment and obtain approval before buying higher-cost items or claiming unusual expenses. Keep receipts and records where the provider requires them, particularly for mileage, activities, equipment and health-related costs.

What determines the amount? Providers commonly consider the child’s age, the type of placement, the level of care required and whether the arrangement is short term, long term, emergency, respite or part of a planned transition. The assessment of the child’s needs may also affect whether additional funding is agreed. A payment for one placement should not be assumed to apply to another, even when the children are of a similar age.

Before accepting a placement, ask the fostering service for a written breakdown covering:

• the basic maintenance allowance and any separate fee;
• how often payments are made and when they begin;
• which costs are included in the regular allowance;
• which expenses need prior approval;
• how travel, contact and activity costs are claimed;
• whether payments continue during holidays, hospital stays, planned respite or temporary absences;
• what happens to payments when a placement ends or changes; and
• whether support is available for essential equipment, adaptations or specialist services.

This information should be part of the financial discussion during assessment and matching. If the child’s needs change, tell the supervising social worker promptly. The provider can then review whether the existing arrangement remains appropriate and whether extra costs need to be agreed.

Tax and benefits also need to be considered. Foster carers may qualify for special tax treatment under the government’s foster carer tax rules, but the result depends on the payments received and the carer’s circumstances. Fostering income can also affect means-tested benefits or other household finances. Keep payment statements and expense records, and obtain current guidance from HM Revenue & Customs, an accountant or a benefits adviser rather than relying on an old allowance leaflet.

Allowances should not be the only factor in choosing a voluntary fostering provider. Compare the financial policy with the training, supervision, out-of-hours arrangements stated in the placement agreement, therapeutic or specialist support, and practical help available for the child’s education, health and family contact. A clear written agreement helps you understand what the regular payment covers and prevents avoidable uncertainty after a placement starts.

As rates and policies can change, request the provider’s current allowance schedule and ask for examples based on the type of fostering you are considering. Your assessing team should explain the figures that would apply to your circumstances, how claims are submitted and what evidence is needed.