Thinking about Fostering? 0800 5 677 677

Back

Fostering Allowances and Taxes

October 15, 2019 | matt

It can be a touchy subject, but the bills do need to be paid.  Find out what you need to know about foster carer allowances and taxes.

Piggy Bank - Fostering Allowances and Taxes

Fostering is not a vocation motivated by money.

Foster carers want to support vulnerable children because they are passionate about helping others, not because they want to be paid.  Of course we can’t speak for everyone, but this is true for the vast majority.

Although motivations to foster are a separate issue, the fact remains that with mortgages, cars, utility costs and food to pay for (just to name a few), fostering wages are an important consideration.

This could be part of the reason why so many carers now prefer to foster with agencies instead of a local authority.  Not only is there better support in most cases, but most agency foster carers are paid significantly more than their local authority counterparts.

So what exactly does a foster carer get paid and taxed for?

Allowances

Short answer: fostering allowances vary quite a lot.

Factors which affect fostering allowances include;

  • The agency you foster with
  • The training & experience of the foster family
  • The age, needs and behaviours of the child or children you care for
  • The responsible local authority

As an agency foster parent you should expect to receive between £360 - £550 per week for each child in your care.  This is considerably more than the governments national minimum rates of between £129 - £194 per week.

For Family Care, our fostering allowance is broken down into two parts – a boarding-out fee and a professional fee.  The boarding-out fee is paid to cover the daily costs of caring for a young person.  The professional fee is a payment made to recognise the skills of the carer and is based on the foster carer’s registration.

Our professional fee has three grades (Band A, B and C) and foster carers move up the grades as their skills develop and they gain more experience.  To reach the highest grade (Band C) foster carers must complete a training programme culminating with a Level 3 Diploma for the Children’s and Young People’s Workforce, all of which is fully funded.

In addition, mileage is covered to/from training and support groups for our foster families (25p a mile) and they receive 2-weeks annual leave payment every year.

Taxes

Fostering families benefit from a fixed tax exemption of up to £10,000 per year (pro-rata) which is shared equally among foster carers in the home.  So, if you are fostering a young person all year round you will not have to pay tax on the first £10,000 of fostering income.

As well as the £10,000 fixed tax exemption, foster families get tax relief for every week (pro-rata) a child is in their care.  For children under 11 the tax relief is £200/week per child and for children over 11 it is £250/week.

WORKING EXAMPLE

Stephen has been fostering a 10-year old boy for the whole of the year, and his 16-year old brother for 7 weeks of the year.  Stephen will not have to pay tax on the first £22,150 he earns.

Fixed tax exemption = £10,000
Child A – 10 years old (52 x £200) = £10,400
Child B – 16 years old (7 x £250) = £1,750

Total = £22,150

This is a straightforward example of how tax works in fostering, but we are not tax experts and foster carers are classed as self-employed.  To help with this, our foster families receive membership to Foster Talk for accountancy and tax advice.  It is the foster carer’s responsibility to register themselves as self-employed and pay their own income tax & national insurance.  Membership to Foster Talk really helps with this.

How fostering affects benefits will be another important consideration for some.  We will cover this in a later article, keep checking back on our website or follow us on Facebook to keep up to date.

 

You can check your eligiblity to foster and find out more about allowances by completing our online enquiry form or calling 0800 5 677677 to speak with one of our fostering experts.

---

Healing Pasts | Building Futures
Since 1988

0800 5 677 677

Like this story? Why not share it?