Foster Carer Payments
Thankfully, fostering is increasingly being viewed as a career choice. With this recognition, a framework has been developed across the relevant government bodies and fostering agencies. It is there to help ensure that Foster Carers feel supported, are suitably trained and appropriately rewarded for their time, effort and commitment.
This article provides a quick overview of the payment framework associated with Foster Carer payments. It is by no means exhaustive, so if you do decide to pursue a career in foster care then we recommend you seek more detailed advice on your personal tax implications or the impact on any benefits you currently receive. When that time comes, here at Lorimer Fostering we can help; we can give you advice and point you in the right direction for expert guidance.
How much does a Foster Carer get paid?
Depending on the needs of the child or young person and the number of placements you have at any one time, you can expect to receive anything between £20,000 to £62,000 per year.
This payment will include a Fostering Allowance to cover things like food, clothes, travel and leisure activities for the child plus a Fostering Payment which is the equivalent of what others might call a Salary.
Foster Carers are eligible for special tax exemptions on the income they receive through fostering; this is described in detail in the ‘Tax & Self Assessment Guidance’ section.
Do Foster Carers pay tax?
Foster Carers are required to pay tax on the profit they make from fostering, but most have none or not very much tax at all to pay after they have taken into account the tax exemptions available to Foster Carers.
The ‘Qualifying Care Relief’ that Foster Carers receive is calculated as part of the tax return that you will complete at the end of each tax year.
If fostering is your only income, your Personal Allowance is also deducted from the ‘profit’ you make, which minimises further your taxable income.
Will fostering affect my benefits?
All allowances and payments you receive from fostering are fully ignored when calculating entitlement to means-tested benefits such as Universal Credit (UC), Income Support, Housing Benefit or Council Tax Relief. This means that those who are eligible for these benefits should continue to receive them at the same rate when fostering.
If you are getting help with your housing costs through UC, you can get payment for one extra bedroom if you are a Foster Carer, even between placements. You will only get payment for one extra bedroom, even if you have more than one foster child living with you. If you are in private rented accommodation, you are limited to the rate for four bedrooms, even if the size of your household means you need more than four bedrooms.
You can’t get extra money in your UC for any children you foster. If you care for a child up to the age of 16 (and often for older foster children too) and claim UC, you will only have to take part in work-focused interviews to be eligible. The same applies between placements, for up to 8 weeks.
Fostering does not count as work when calculating Employment and Support Allowance or Jobseeker’s Allowance, so these should remain unaffected if you meet the other conditions for entitlement.
You may be able to continue to claim Working Tax Credit if you receive this already. Foster caring counts as ‘qualifying paid work’ in the assessment for this benefit.
As a Foster Carer you cannot claim Child Tax Credit or Child Benefit for a foster child but you can still claim it for your own/birth children.
However, you can claim Disability Living Allowance (DLA) for a foster child if they meet the criteria. You may also apply for Carer Allowance to look after a child who receives DLA at the middle or higher rate. Fostering income is again completely disregarded when calculating this benefit.
Fostering does not affect DLA that you currently receive, Personal Independence Payment (PIP) or Attendance Allowance.
Fostering does not usually affect your Pension Credit either.
For more information and to check your benefit entitlements, go to:
Putting our money where our mouth is..
Being a Foster Carer is increasingly being recognised as a valued career choice and not a voluntary service. And so, in taking the step to become a Foster Carer you will be financially rewarded for your time, effort and commitment. You will also be emotionally rewarded for the difference you are making to a vulnerable child… and no one can put a price on that.
Get in Touch
If you need any advice about Foster Carer payments or would like to speak to a team member; please get in touch with Rachael at Lorimer Fostering. We are always happy to help and will do our best to answer your questions. Submit your details using the form below or call/WhatsApp Rachael on 07938 575 738 and we’ll get back to you soon.