All foster carers get paid a foster carer allowance, and it covers the time for when a child/young person is placed with you.
The foster carer allowance (or fostering allowance) is an amount of money paid to a foster carer to cover the necessities of the care of a child – this covers food, clothing, travel, holidays, activities, savings and pocket money for the child placed – basically, everything! We pay our foster carers on a monthly basis, but the fostering allowance is based on a weekly rate. The allowance covers both an element of care provided to the child (e.g. clothes, food, home) and a salary element to you as a foster carer. The fostering allowance is eligible for tax relief, so the majority of foster carers pay none or hardly any income tax on their foster care allowance.
At CFS we are open with you about finances and are happy to discuss your queries in an open manner. We consider that we pay a generous and highly competitive weekly amount to ensure that you can offer a child the best standard of care.
Foster Carer Allowances Weekly Rates
The amount that CFS pay foster carers is between £400-£500 per week, per child/young person, for children/young people aged between 5-18 and increases in line with the age of the child (see below table).
Step Down (from Residential Care)
We offer a standard rate of £500 per week for any age of child moving from a residential setting into foster care – referred to as a ‘step down’ placement (sadly, many children are placed in an emergency into residential homes from a young age, for example, 7 or 8), as we recognise that this will likely require more input from you as a carer, as well as support services that we offer, as the child/young person adjusts back into a family setting.
Parent & Child
Parent and child placements are where usually a very young child or baby is placed alongside its parent with you, this is usually to help the parent care for their child and promote the best outcomes for the child. These are considered specialist placements and as a foster carer you need to be approved for this area of work, but if it is something you are interested in, we can explore this with you during your assessment.
Does foster carers’ pay affect benefits?
If you are receiving foster carers’ pay (fostering allowance), you are still entitled to receive certain benefits, especially if you are a single foster carer.
How does tax work with a foster care allowance?
They are eligible for tax relief, so pay none or hardly any tax on their foster care allowance (also known as a fostering allowance). Additionally, you might be eligible to claim Working Tax Credit.
Is foster care pay taxed?
Generally, it’s not. Income tax placed an exemption on foster care pay. Introduced by the UK government in 2003, it means you don’t need to pay tax on the first £10,000 your household makes in any year (the amount is less for shorter periods).
Foster care pay is subject to additional tax relief of up to £250 a week for every week a child is in your care. To work out what all this means for you, follow this simple guide on the government’s website.
For the purposes of calculating the tax on your foster care pay, HMRC treats foster carers as self-employed. You’ll have to fill out annual tax return forms, which you can find guidance for on this page of the government’s website. You can also call HMRC to request a copy – ask for an IR 236 help sheet. Read more about foster care pay on our Financial Support page.
Do foster carers pay National Insurance?
Yes, the UK government requires that foster carers pay self-employed National Insurance contributions. You must register as self-employed when you become a foster carer. If you’d like extra information or some help setting up, call the Newly Self-Employed Hotline on 0300 200 3504.
Do foster carers get tax credits?
Some foster carers do receive tax credits like Working Tax Credits and Child Tax Credits (if you have a child of your own). The amount depends on quite a few variables, including how often you work, how old you are, and how much your household income comes to.
Everyone’s situation is different, so it’s best to contact HMRC for an assessment. You can call them on 0345 300 3900.
What benefits can you claim if you’re fostering a child in the UK?
Your eligibility to claim benefits depends on your individual circumstances, so our advice is to contact the Department of Work and Pensions direct. However, there are some general trends you might find useful to know.
If your benefits come from a local council, voluntary organisation, or a private organisation on behalf of the local council, paid foster work shouldn’t affect your benefits. If you claim Universal Credit, Jobseeker’s Allowance, Income Support, or Employment and Support Allowance, paid foster work could affect your benefits.
The best way to find out where you stand is to contact your local Jobcentre Plus. You can find the phone number you need on the Job Centre Plus contact page. Alternatively, seek specialist advice from an advisory agency like the Citizen’s Advice Bureau.
If you are interested in changing a child’s life for the better and you wish to foster, please get in touch with our expert team today on 01204 704777 or [email protected]