Foster Carers receive excellent pay and rewards. Weekly allowances vary from £310 to £510 per child or young person depending on their level of need.
Foster Carers receive one payment every fortnight when a child or young person is living with you, which consists of 2 parts:
- A child maintenance element payment 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.
Fostering is classed as self-employment and therefore Foster Carers are responsible for their own Tax and National Insurance, however, there are generous tax allowances available to help.
Money earned from Fostering would be as follows:
Personal tax allowance
The current standard rate is £12,500 per year which will apply if it has not been used for any other work undertaken during the tax year.
There is 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 do not have to pay tax on the first £10,000 income (after expenses) 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 do not 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|
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 does not have to pay tax on the first £25,000 (or £36,000 if also using a standard personal allowance) she earns:
Tax exemption = £10,000
Child 1 (52 x £250) = £13,000
Child 2 (10 x £200) = £2,000
Total = £25,000
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
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