Foster care brings challenges as well as rewards. One challenge we don’t want you to have is the worry of an irregular income. We offer our foster carers the financial security of weekly Bridging Retainer Payments, plus a one-off payment when you accept a new foster child.
Foster carers will pay very little or no tax at all on their fostering allowance thanks to Qualifying Care Relief.
This means you don’t need to pay tax on the first £10,000 your household makes in any year.
You also receive additional tax relief of up to £250 a week for every child in your care.
When you become a foster carer, you will need to register as self-employed, complete self-assessment tax returns to declare taxable income once a year and pay National Insurance.
As a self-employed foster carer, you are eligible to claim most state benefits, thanks to Qualifying Tax Relief.
You will still be entitled to claim child benefit for your own children and other children that are dependent on you. Exclusions will apply to the children that you are now fostering as you are already receiving the fostering allowance for each child or young person in your care.
Your fostering allowance is not classed as income when calculating your eligibility for means-tested benefits.