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Allowance For Fostering

Foster Carers receive excellent pay and rewards.  Weekly allowances vary from £322 to £468 per child or young person depending on their level of need.

Next Stage for Fostering

Excellent Pay and Rewards

Foster Carers receive one payment every fortnight when a child or young person is living with you, which covers:

  • A child maintenance allowance is provided to cover the costs incurred when caring for children and young people e.g. food, clothing, pocket money, personal items etc.
  • A professional fee for the Foster Carer. Our agency recognises Foster Carers as professional’s in the part they play in caring for children and young people.
Young student doing homework at home with school books, newspaper and digital pad helped by his foster mother. Next Stage Fostering Wigan and Bolton

Tax-free Earnings

Foster Carers receive the following payments:

  • For one child an average payment of £22,501 per year.  The majority of Foster Carers do not pay any tax, therefore this is equal to a salary of £26,362.00 per year.
  • For two children an average payment of £45,002 per year.  Again, the majority of Foster Carers do not pay any tax, therefore this is equal to a salary of £59,362.00 per year.

On top of the fostering allowance you also receive the following:

  • A set up fee of £100 per child placed
  • 2 weeks paid respite per year
  • Free membership to The Fostering Network
  • Any many more benefits as an approved Foster Carer

Explanation of why Foster Carers usually do not pay any tax:

The Government want to encourage people to become Foster Carers and therefore they have set generous tax allowances.

Fostering is classed as self-employment and therefore Foster Carers are responsible for their own Tax and National Insurance.

Money earned from Fostering would be as follows:

Personal tax allowance

The current standard personal tax allowance rate is £12,570 per year which will apply if it has not been used for any other work undertaken during the tax year.

Tax exemption

There is a fixed tax exemption of up to £18,140 per year (less if for a shorter period) which is shared equally among any Foster Carers in the same household. This means you do not have to pay tax on the first £18,140 income (after expenses) you make from fostering.  This is on top of your personal tax allowance.  This equates to £30,710.

Tax relief

On top of your personal allowance and £18,140 exemption (£30,710), you also get tax relief for every week (or part week) that a child is in your care.

Age of childTax relief
Under 11£375 per child
Over 11£450 per child

This means that if you did not use your personal tax allowance you would have a tax allowance of £50,210 for a child under the age of 11 and £54,110 for a child over the age of 11.  These figures would be higher if more than 1 child was placed.

Example of how the tax is worked out:

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 would earn around £28,120.

Laura’s tax exemption would be: £18,140 + Child 1 (52 x £450 = £23,400) + Child 2 (10 x £375 = £37,50).

This works out at a total tax exemption of £39,900, plus her personal tax allowance if fostering is her only income.  As Laura earned £28,120 she would not pay any tax on this.

Foster Carers are eligible for National Insurance credits, which count towards your State Pension.

The important thing to remember is that each individual’s financial circumstances are different. For more information, visit the Government website: www.gov.uk/foster-carers/help-with-the-cost-of-fostering

For free help and advice about fostering and becoming a Foster Carer, please call us today on 01204 201203 or fill in the form below.

Happy young Foster parents and children having fun, playing board game at home

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