Money Matters and Insurance
Once you have completed the preparation training and the fostering induction standards and have a child placed with you, you will receive at least the minimum fostering allowances listed in the tables below. Allowances are usually made up of two components. The basic age related child allowance and the competence payment relating specifically to the foster carers tier level within the progression scheme.
If you have any queries about allowances or if you think you have been under or over paid, contact the finance section in the Fostering Service as soon as possible.
Payments to you are made in arrears, direct to their bank or building society.
Click here for the national minimum fostering allowances.
The national minimum allowances are only the base minimum rates. The actual allowance that you will receive will depend on a number of factors, in particular the specific needs of the child. You may also get paid in recognition of your skills, commitment or time. Fostering agencies may make one payment to cover both of these.
While a child is Looked After, they are entitled to a number of other allowances.
The level of these payments is reviewed once a year.
This can be applied for once a year. You should let your Supervising Social Worker know when you plan to take a child/young person on holiday and they will arrange payment. The amount payable depends on the age of the young person.
It is expected that all children who are looked after do receive a regular amount of pocket
money. However, there are other issues that need to be considered regarding the amount
given. Fostering Network suggest that issues relating to pocket money and personal
allowances should be discussed with the foster carer and young person at the start of the
placement and addressed within the placement plan. Issues to be considered are:
- There needs to be some measure of equality between children within the foster
household. Clearly it would be unfair if foster children received either more or less than
the foster carer’s own children where their ages are similar. Therefore, discussions
with carers need to take into account the pocket money paid to other children in the
household; - The rate of pocket money paid to young people should be realistic. Fostering Network
suggest that the amount should not exceed the element for personal needs within any
benefit payment a young person could expect if they were unemployed. This is important
because it is the responsibility of both social workers and foster carers to help ensure
a smooth transition to independent living after foster care. It would be unhelpful to
this process if a young person’s pocket money enabled her/him to enter into a lifestyle
which was not possible if s/he later had to live independently on limited income such as
education grants or welfare benefits.
This should be included in the first payment in December or the relevant month if another festival is celebrated.
This should be made with the payment immediately before the date of the child's birthday.
Expenses are paid by the Fostering Service for making trips to hospital; attend reviews, contact arrangements or other exceptional travel expenses. This will be at a set rate per mile.
Discuss with your Supervising Social Worker, any requests for specialist equipment.
When a child first arrives there may be a need for extra money to buy clothes. Please discuss this with your Supervising Social Worker.
The cost of getting birth certificates (and copies) and passports will be met by the Children in Care team.
Information is also available from the GOV.UK website about passports.
There's a fixed tax exemption of up to £10,000 per year (less if for a shorter period) which is shared equally among any foster carers in the same household. This means you don't have to pay tax on the first £10,000 income you make from fostering.
On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you don't have to pay tax on some of your earnings over £10,000.
| Age of Child | Tax Relief |
|---|---|
|
Under 11 |
£200 per child |
|
Over 11 |
£250 per child |
All payments made to you will be itemised. You should keep this information as a record for income tax purposes.
Please see: Foster Carers Relief Information (HMRC).
See relevant information on the GOV.UK website.
If you foster you may be eligible for National Insurance Credits which count towards your State Pension.
You should keep a record of how the allowance is being spent on a child/young person. You should keep receipts where possible. The child/young person should sign for money if possible that they are given e.g. pocket money and clothing allowance. This helps build a record of what has been spent, which you can show if asked about it at a later date.
You must inform your Home, Building and Contents and Car insurance company once you have been approved as a foster carer.
Tell them about the numbers of children and age ranges you expect to take. You should ask the insurance companies for written confirmation that they have included foster children on your policies. A copy of these letters should be given to your Supervising Social Worker.
Last Updated: November 29, 2023
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