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Foster care pay and allowances

Foster carers and prospective foster carers sometimes say they feel uncomfortable asking about money. But we’d like to reassure you that it’s fine to ask about pay and allowances – in fact, it’s very important.

How much do foster carers get paid?

Once we’ve approved you to provide paid foster care, you will receive foster care pay (known as a fostering allowance) in the region of £24,500 a year (around £2,040 on average per month). For most foster carers, this will be tax-free and not affect the benefits you’re currently receiving. You will also be eligible for our Bridging Retainer Payments.

Every child deserves to be treated and well looked after, no matter your circumstances. That’s why we have no set single payment fee, and instead adjust our payments depending on your existing family situation. The minimum weekly fees payable are:

Examples of foster care payments

  • Tom and Sarah
    Foster a young unaccompanied asylum seeker, aged 15. They receive £407.50 per week.
  • Dev
    Fosters a mum and her baby girl, aged three months. Dev receives £783.74 per week.
  • Ann and Selena
    Foster two sisters, aged seven and eight. Ann and Selena receive £833.10 per week.

How does fostering pay work?

We want you to feel financially secure when you’re a foster carer with us, so you can focus your attention on providing great care and enjoying a good quality of life. That’s why foster care pay from National Fostering Group is far higher than the government’s recommended weekly allowance.

Here are some important things to remember about foster carer payments:

When I became self-employed, I was worried I’d have to save every single receipt and pay an accountant to file a complicated tax return every year. But it’s not like that at all. You don’t have to keep receipts and it’s easy to submit your tax return yourself.

Megan, foster carer

What your foster care pay covers

The fostering allowance is intended to cover all the needs of your foster child. As you spend time with your foster child, you will know what’s best for them. For this reason, we don’t tell you how to spend your fostering allowance, and instead give you the freedom to choose how to spend the money so it supports what’s best for your family life.

The fostering allowance you receive has two components – your professional fee and money to cover the child’s needs.

  • Your professional fee recognises your skills, training and experience as a foster carer. It is the payment we make to you for providing first-class care with National Fostering Group.
  • Fostering allowance for the foster child’s physical needs, including food, clothing, travel, activities and savings.

How much is the fostering allowance?

There is no single, fixed fostering allowance because foster carers have varying skills and experience. The amount you receive also depends on the type of foster care provided (for example, if a foster child has complex needs), the child’s age, and which area of the UK you are currently residing in.

When will I receive my fostering allowance?

You will receive your fostering allowance on a weekly basis. This way, you’ll have a regular income making it easier to manage your day-to-day expenses.

You don’t have to pay self-employed National Insurance Contributions if you’re a foster carer of retirement age. I mistakenly paid them for two years before I realised!

Jack, foster carer

Tax and foster care pay

Foster carers are regarded as self-employed, which means they generally won’t be subject to income tax. This means your fostering allowance is the salary equivalent of a £30,000 role before tax. Foster care pay doesn’t affect state benefits. However, it’s difficult to estimate the exact figure you’ll get paid for fostering. You might earn more than the £24,500 average, or you might earn less.

This is because foster care falls under the Qualifying Care Relief (formerly called Foster Care Relief) tax scheme, which means you won’t usually have any taxable profit.

While foster care payments are generally not taxed, there are some situations where this is not the case. This typically occurs when certain factors have been taken into consideration, such as the total amount of foster payments you receive and any additional sources of income you may have alongside foster care payments.

Exceptions to foster care pay and tax

At the end of each tax year, you will need to perform a simple calculation to determine your tax threshold for that year, and whether you have exceeded it. If your earnings surpass this threshold, the excess is considered profit, which may require you to pay tax.

If this is new to you, don’t worry – as a foster carer, your self-assessment tax returns are designed to be straightforward. We also offer a comprehensive guide to help you understand if you owe tax on your foster care pay. It only takes three easy steps to assess your situation, and if you’re still struggling, we are here to provide the support you need.

Pay and the different types of foster care

Your foster care pay depends on the specific fostering type you choose, with each type requiring a unique set of skills and expertise. This is why pay for foster carers in the UK can vary. For instance, carers who foster siblings earn more than carers who foster a single child. While other types may offer slightly more or less, we always ensure our carers receive sufficient financial support to provide their foster children with the best possible quality of life.

Foster care pay, state benefits and pensions

Your fostering allowance won’t affect most state benefit payments because fostering counts as self-employment. This means you may also be entitled to Working Tax Credit or Child Tax Credit.

Foster carers and National Insurance

All foster carers in the UK must register as self-employed and pay National Insurance Contributions. You do not have to pay National Insurance after you reach State Pension age unless you’re self-employed and paying Class 4 contributions. Don’t worry if you haven’t been self-employed before, as a foster carer it’s very simple and we offer you all the support you need.

Bridging Retainer Payments between foster care placements

We do all we can to provide you with the financial security of a regular income between placements. This is in the form of a weekly Bridging Retainer Payment, plus another payment made at the start of your next placement.

Need more information about foster care pay?

If you would like more information, please fill out our enquiry form. If you ask for a call back, a fostering advisor from your local National Fostering Group team will get in touch to explain more about how to become a foster carer, and answer any questions you have about foster care pay.

Foster Care Pay and Allowance FAQ's

Can I continue to work while fostering?

Some of our foster carers choose to leave their jobs to focus on caring for their children full time. However, this choice is entirely up to you. Whether you choose to continue to work or step away from your job, you will still receive the foster care pay. This support is there to help you provide the best care for your foster child, no matter your specific circumstances.

How much do foster parents get paid?

Exactly how much foster parents get paid in the UK depends on factors including the age and needs of the foster child, skills and experience, and the number of children fostered. On average, foster parents get paid in the region of £24,500 a year for fostering. This makes the monthly pay for the average foster parent around £2,040, tax free.

What are allowances for foster carers?

‘Allowances for foster carers’ usually refers to the fostering allowance. This is the money paid to a foster parent for fostering a child or children. It’s also known as foster carer pay, foster care payments, foster carers allowance and foster allowance. The fostering allowance has two components – a professional fee and money to cover the child’s needs.

‘Allowances for foster parents’ might be used by some people to refer to other things: the perks and benefits we offer our foster carers, like high street discounts; the fact that foster carer pay doesn’t affect state benefits or pensions; and also that fostering tax benefits mean you’re unlikely to pay any Income Tax on your earnings as a foster carer.

Is Foster Care income taxable?

Fostering is an important role. The government has applied an Income Tax exemption on foster care pay, called Qualifying Care Relief. This means foster carers don’t pay tax on the first £10,000 your household makes in any year. Foster care pay is subject to additional tax relief of up to £250 a week for every week a child is in your care. This is a broad overview – we recommend that you explore this topic of foster carer allowance and tax in more detail.

Does foster carer pay affect state benefits?

Every foster carer’s situation is unique but what we know for certain is that your fostering allowance won’t affect your entitlement to most state benefit payments. This includes Housing Benefit and Universal Credit, as well as your state pension. However, the exception is Jobseeker’s Allowance (JSA), which will be affected if you’re receiving a fostering allowance.

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