What financial support is available through the Foster Care 18–21 Programme?

Financial support through the Foster Care 18–21 Programme is normally built around an agreed contribution to the foster carer for the young person’s continued household costs, with the precise arrangement set by the responsible local authority or fostering provider. It may also involve separate help for the young adult’s education, training, employment or transition towards independence. These elements should be explained in writing before the arrangement starts.

Support for the foster carer

When a young person remains living with their former foster carer after turning 18, the payment arrangement is usually different from the allowance made for a child in foster care. The local authority may provide a Staying Put or equivalent payment to recognise the costs of keeping the household available. This can contribute towards items such as:

• food and ordinary household bills;
• heating, electricity, water and other shared costs;
• the young person’s use of a bedroom and communal areas;
• travel or other agreed costs connected with education, work or training; and
• additional support identified in the young person’s pathway plan.

The payment is not automatically a salary for the carer, and it should not be assumed to cover every cost. The written agreement should make clear what the contribution is intended to fund, whether any costs are paid separately, who receives each payment and what happens if the young person’s circumstances change.

Financial help for the young adult

A young adult may have their own income or financial support alongside the household contribution. Depending on their circumstances, this could include earnings, benefits, an education or training payment, or support connected with moving towards independence. The carer’s payment and the young person’s personal income are separate matters, so the young person should receive clear advice about which applications they need to make and how their living arrangements affect them.

The personal adviser and pathway plan should help identify costs such as travel, clothing, equipment for work or study, accommodation planning and setting up a future home. A young adult may also need help managing a budget, opening or using a bank account and understanding regular household contributions. These discussions should be handled as part of preparation for independence rather than leaving financial expectations unclear.

Benefits, tax and other financial effects

Payments connected with an extended foster care arrangement can affect the financial position of both the carer and the young adult. The treatment may depend on the type of payment, the agreement used and the person’s wider circumstances. Before accepting an arrangement, ask the local authority or provider to explain:

• whether the payment is treated as taxable income;
• whether it could affect the carer’s means-tested benefits or other support;
• whether the young adult’s benefits or other payments are affected by living with the carer;
• what information must be reported to HM Revenue and Customs or a benefits authority; and
• whether specialist welfare-rights or tax advice is available.

Foster care tax arrangements do not necessarily apply in the same way once the young person is over 18, because an extended arrangement is not the same as a child foster placement. Carers should therefore obtain individual tax advice rather than assume that an existing allowance or relief continues unchanged.

What should be agreed before the arrangement begins?

A written financial agreement should sit alongside the wider living-together agreement. It should record the payment amount or calculation method, payment date, review arrangements and any circumstances that could change the contribution. It should also explain whether the young adult is expected to contribute towards food or bills, and how any earnings or benefits are taken into account. Expectations should be proportionate and discussed with the young person, particularly where they are learning to manage money.

Ask for clarification if the arrangement does not explain who pays for exceptional expenses, repairs, furniture, transport, activities, technology or costs linked to disability or additional needs. Keep records of payments and agreed expenses, and raise concerns promptly with the supervising social worker, personal adviser or local authority. Financial arrangements should be reviewed when the young person enters work, starts or leaves education, changes benefits, moves towards independent accommodation or when the household’s costs change.