Fees and allowances

Tax arrangements

Foster carers are expected to be registered as self-employed because foster carers are required to file tax returns. We can signpost you to seek advice about how to do this. .

In your tax return, you’ll be able to claim:

• a tax exemption of up to £19,360 per household
• tax relief for every week you foster a child

This is known as qualifying care relief.

You may be entitled to National Insurance credits, which count towards your State Pension.

Tax exemption

In a tax year, households do not pay tax on the first £19,360 they earn from fostering. You’ll still pay tax on money you earn from a job or investment.

Tax relief

On top of the £19,360 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you do not usually pay tax on your earnings from foster care, even if they go over £19,360.

Example given by the government about tax when fostering

Laura is a foster carer for a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. She gets:

Tax exemption for the household = £19,360

Tax relief on what she earns for fostering the 14 year old (£485 x 52 weeks) = £25,220

Tax relief on what she earns for fostering the 8 year old (£405 x 10 weeks) = £4,050

Altogether, Laura does not need to pay tax on the first £48,630 she earns from fostering.

Can you claim benefits while fostering?

Yes you can continue to claim benefits but being a foster parent can affect your benefits. The government provides information on their website. Check a benefits calculator to see what you’re eligible for.

If you’re claiming benefits you should let us know and we can signpost you to the advice you need.  

You can get disability benefits for your foster child if they meet the criteria. You may also be able to claim Carer’s Allowance if a foster child living with you gets Disability Living Allowance or Personal Independence Payment.

Sometimes the role of fostering a child who has experienced abuse or neglect can be challenging. But the happiness brought by building a trusting and loving relationship with a child is out of this world. We provide you with lots of support. You will have your own friendly social worker, who you will get to know really well. The role of the social worker is to enable you to feel successful, helping you with practical day to day help and supporting you at meetings or finding services for children. You will have access to someone 24 hours a day if needed. You will have the support of other foster carers, the ability to take breaks and opportunities to develop your skills and knowledge. We are a friendly approachable team. The social workers work with small caseloads so that they can spend time with you and help you. It is a challenging, yet rewarding, role that offers you the opportunity to support a child to rebuild their self-confidence and self-esteem. Foster carers aim to provide new experiences and support children to make choices and achieve their true potential, we support you to be the best version of you.

Foster carers can expect a combination of allowances to support the costs of raising a child and fees for the support you will provide a child in your care. The combination of these will enable people fostering with us to get on Average £500.06 per week. This amount includes allowances for birthdays, festivals, and summer school holidays.

The weekly fee paid to foster carers is determined by the care need of children living with them. For example for someone new to fostering, the likelihood is that they would feel better supporting a child or young person with lower care needs than someone who has been fostering for several years with lots of experience and confidence.

Fees and allowances vary as result of children’s individualised care need. We can share our fees in more detail with you, but when averaging the fees and allowances it works out at just over £500 per week. (Some fees are lower and some are higher than this).

Supporting children with everyday needs when fostering involves providing everything a child needs to thrive, including food, clothing, toys, warmth and opportunities to enjoy interests and hobbies. Foster carers are expected to support and care for a child as they would if the children were their own.

We provide a variety of allowances to help with children who may arrive with very little of their own belongings. We support you to ensure that children can celebrate birthdays, and festivals, like Christmas. We offer a variety of allowances on top of weekly foster payments.

Many foster carers give up their work to be full time foster carers. Some foster carers provide loving homes for more than one child and consequently are able to see foster fees in excess of £45,000 per annum. (Which is mostly tax free). This is assuming that children remain with foster carers for a full year.

We can provide more detailed information about your situation and explain more about what is expected to be provided for children and young people in your care, so you have a greater understanding of what you can expect from being a full time foster carer.