I was pleasantly surprised when they told me fostering allowance wouldn’t have an impact on my Housing Benefit. And I don’t have to pay tax either.
Some of our foster carers give up their jobs to care for children, so the foster care pay they receive is vital to support them and their household. And, while money is not the main motivation for people to become foster carers, nevertheless our foster carers perform a really important role, so it’s right that they are properly remunerated.
If you’re considering going into paid foster care, this section will explain about pay, allowances, tax, National Insurance, state benefits and pensions.
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.
We want you to have peace of mind. We recognise that foster caring can sometimes be stressful. It’s important not to have money worries so you can care for the children in the way you’d like to and also look after your own wellbeing.
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.
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 the National Fostering Group.
It’s important the fostering allowance also covers the foster child’s physical needs, including food, clothing, travel, activities, savings and so on. We provide clear guidance on how best to spend this money so the child has is supported to have a healthy, happy and balanced life.
This is why there is no single, fixed fostering allowance. It differs because foster carers have different skills and different experience. The amount you receive also depends on the type of care provided (for example, if a foster child has complex needs), the child’s age, and whether you are fostering in London and the South East or the rest of the UK.
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!
In general, foster carers’ pay isn’t subject to Income Tax. For tax purposes, foster carers are regarded as self-employed. If this is all new to you, don’t worry – as a foster carer, your self-assessment tax returns are straightforward. We will offer you all the support you need.
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 haven’t been self-employed before, as a foster carer it’s very simple and we offer you all the support you need.
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.
Your fostering allowance won’t affect most state benefit payments. Because fostering counts as self-employment, so you may be entitled to Working Tax Credit and also Child Tax Credit.
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.