Financial Support for Foster Parents
We know that money is important when it comes to fostering. That’s why we offer a generous financial package to support you in caring for your foster children. You can learn all about the fostering allowances we provide and how tax and tax relief work for foster carers. Are you wondering if you can claim benefits or how fostering might affect your pension? We’ve got answers for that too! Whether you give up work, go part-time, or continue your current job, we make sure the money adds up so you can focus on what really matters—making a difference in a child’s life.
Our financial package is worth up to £543 a week.
- £459.15 per child per week placed aged under 11
- £506.25 per child per week placed aged 11 or over
We paid an extra 10.25% on our 22/23 rates to reflect the increased pressures foster parents experienced during the ongoing cost of living crisis.
The financial support is made up of the foster parent fee, the foster parent allowance and additional holiday payments. It can be up to £531.28 (depending on the age of the child) when short break care and holiday payments are deducted. If you don’t use your short break care, you get this as a lump sum at the end of the year.
Other allowances include:
- 18 days Short Break Care – From time to time, you may need a break, and we will work with you to support this. However, if you don’t use it, we will pay you the cash value for any outstanding.
- Birthday Payment – £80 per child (under 11) or £88 per child (over 11)
- Holiday Payments – 6 weeks in summer paid at £80 (under 11) or £88 (11 and over)
Tax and foster care:
Foster parents don’t usually pay tax on their income. You do need to register as self-employed. You need to let them know as soon as you can to avoid paying any penalties.
You can claim Qualifying Care Relief, which is composed of:
- A tax exemption of up to £18,140 per fostering household
- A tax exemption for every week (or part of a week) that a child is in your care. In practice, this means that some of the earnings you have over £18,140 you won’t pay tax on. Tax relief is paid at the rate of £375 per child aged Under 11 or £450 per child aged 11 or over.
You may also be entitled to National Insurance Credits. These count towards your state pension.
Benefits:
You might be able to claim some benefits if you foster, and fostering may affect some benefits you are already on.
You can get disability benefits for your foster child if they meet the relevant criteria, and you may be able to claim a carer allowance if your foster child gets personal independence payment or disability living allowance.
Universal credit does not count fostering as self-employment or work. It should not affect eligibility for universal credit. All fostering payments are disregarded as income. If you foster a child aged 1 to under 16, you are required to attend work-focused interviews but not to gain work. When the child becomes 16, you would be required to look for and be available for work. Your fostering allowance won’t affect universal credit or housing benefits. Jobseekers allowance is, however, affected. It won’t affect things like disability living allowance or carers allowance if you claim these for your child.
To learn more about benefits and fostering, you can check out The Fostering Network’s Benefit Guide.
Pensions:
You will earn class 2 or 4 national insurance credits as a foster carer; these will count towards your state pension. If you want to claim these credits, you need to complete a form called ‘CF411A’ annually, with evidence to show you’re a foster parent.
You can claim state or private pensions and continue fostering. Many foster parents are of pensionable age.
Fostering is more than a rewarding experience—it comes with financial benefits to support you and the child in your care. From generous allowances to tax relief and additional resources, we ensure you’re well-supported on this incredible journey.
Ready to learn more or have questions about the support we offer? Get in touch!