Compared to supporting a young person in the residential care system, foster care is relatively inexpensive. Foster carers will often look after more than one child and become extremely skilful in their particular area of expertise. But the importance of the work they do for society needs to be reflected in the level of financial support they receive.
All foster carers receive an allowance to cover the cost of caring for a child in their home.
For foster carers working on behalf of an agency, this is set by the individual fostering agency, and is usually dependent on the age of the looked after child.
Fostering Network produces an annual guide, Foster Care Finance, recommending the basic levels of allowances it believes agencies should be paying.
In England the government has now introduced national minimum allowances for foster carers.
Increasingly, fostering is being seen as a “professional” role and many local authorities, voluntary and independent fostering agencies run schemes, which pay foster carers a fee. This may be linked to the child’s particular needs but is often a reflection of the skills, abilities, length of experience or professional expertise the foster carer has.
The introduction of tax relief in 2003 means that foster carers in the UK do not pay tax on their income from fostering, up to a maximum of £10,000 plus allowances.
More information on this can be found on http://www.hmrc.gov.uk/individuals/foster-carers.htm.
HMRC have also created a free e-learning module for foster carers which provides detailed information about tax credits and benefits along with advice about registering as self-employed, qualifying for care relief, what records you need to keep for HMRC and how to foster in partnership. You can access the course here: http://www.hmrc.gov.uk/courses/syob/fc/index.html.
National Insurance contributions
Since April 2003, foster carers have also been entitled to Home Responsibility Protection – a way to make sure that you do not get less Basic Retirement Pension just because you have stayed at home to look after a child.
Contact Foster Care News to use our free agency matching service. Apply to foster children