HOW DO FOSTERING ALLOWANCES WORK?
Foster care allowances are given to foster carers in order to practically help them care for the children they look after – and reward them for their hard work. If you foster with Parallel Parents you can receive up to £500 per week, per child you look after. This is usually tax-free and doesn't affect any benefits you already receive.
Use the calculator below to work out how much you could receive for fostering.
Q1. How much fostering experience do you have?
Q2. How many children do you plan to foster?
You could receive:
How is this amount calculated?
A foster carers allowance comes out to roughly £20,000 per annum, paid weekly.
We have a level system according to the experience of foster carers, which awards roughly an extra £1000 per child, per annum. This is because such carers have more experience dealing with complex behaviours and have received more training.
For example, fostering two children or young people with about a years of experience would equal an allowance of about £42,000.
This allowance can vary depending on each child's specific needs, some of which may be more complex, as well as your experience. There are also extra allowances for celebrations, special occasions, and the like, but this is the approximate amount per fostering placement.
TAX ON YOUR ALLOWANCES
Allowances are usually tax free and don't affect any benefits you
already receive. The exact rules depend on the amount of fostering
allowance you will receive.
Generally by caring for one child, the allowance will be tax-free. However, if
you receive a higher allowance, perhaps by caring for siblings, then it could be taxed.
Though the amount that can be taxed is much lower compared to other sources of income.
To work out how much of your allowance can be taxed, you first need to work out your total allowance from fostering.
You can get an idea of this with the calculator above. If you're currently fostering, you should also include any other payments you receive, like expenses or respite payments.
As per the Spring Budget of 2023, every fostering household receives £18,140 of qualifying care relief per year, previously £10,000, as well as a weekly tax relief allowance per child you are fostering.
This weekly allowance is £375 per week for children under aged 11, and £450 per week for children aged 11 and over. Previously £200 per week for under 11 years old and £250 per week for 11 years and older.
So, to work out how much of your allowance is taxed, just subtract your total tax relief from your total allowance.
BENEFITS WHILE FOSTERING
Usually fostering doesn't affect any benefits you receive. Assuming that your financial circumstances apart from fostering don't change, then claiming for benefits like income support and housing benefit are unaffected.
As a foster carer, you may be eligible for some of the following benefits:
Employment Support Allowance
(NOT income dependant)
Disability Living Allowance
Personal Independence Payment
Working Tax Credit
Child Tax Credit
Housing and Council Tax Benefit
NATIONAL INSURANCE WHILE FOSTERING
Paying National Insurance is dependant on your personal situation. If you're not required to pay tax on your fostering allowance, then you also won't need to pay National Insurance.
However, you may wish to pay voluntary National Insurance so that you can claim state benefits, including the state pension.
Start a rewarding career in which you can make a real difference. We will fully train and prepare you to be a great foster parent and help give a less fortunate child a brighter future.
We give you all the support information you need to get started as a foster carer. If you have a question that hasn't been answered by our website, feel free to start a quick web chat with us, email us, or give us a call, and we'd be delighted to answer your query!