Money Matters and Insurance
Once you have completed the preparation training and the fostering induction standards and have a child placed with you, you will receive at least the minimum fostering allowances listed in the tables below. Allowances are usually made up of two components. The basic age related child allowance and the competence payment relating specifically to the foster carers tier level within the progression scheme.
If you have any queries about allowances or if you think you have been under or over paid, contact the finance section in the Fostering Service as soon as possible.
Payments to you are made in arrears, direct to their bank or building society.
Click here for the national minimum fostering allowances.
The national minimum allowances are only the base minimum rates. The actual allowance that you will receive will depend on a number of factors, in particular the specific needs of the child. You may also get paid in recognition of your skills, commitment or time. Fostering agencies may make one payment to cover both of these.
While a child is Looked After, they are entitled to a number of other allowances.
The level of these payments is reviewed once a year.
For more information see fostering fees and allowances information and guidance for foster carers in the Local Resources.
The cost of getting birth certificates (and copies) and passports will be met by the local authority. Please speak to your supervising social worker who will be able to submit a finance request for these ID documents.
Information is also available from the GOV.UK website about passports.
When you are fostering, you will need to be registered as self-employed and file tax returns. See File Your Self Assessment Tax Return Online.
You will be entitled to qualifying care relief which means that you will be entitled to:
In a tax year, households do not pay tax on a fixed amount of the money they earn from fostering. You will still pay tax on money you earn from a job or investment.
On top of this exemption, you also get tax relief for every week (or part week) that a child is in your care.
All payments made to you will be itemised. You should keep this information as a record for income tax purposes.
For further information and current figures, please see: Foster Carers Relief Information (HMRC) and Help and Support for Foster Parents in England.
See relevant information on the GOV.UK website.
If you foster you may be eligible for National Insurance Credits which count towards your State Pension.
You should keep a record of how the allowance is being spent on a child/young person. You should keep receipts where possible. The child/young person should sign for money if possible that they are given e.g. pocket money and clothing allowance. This helps build a record of what has been spent, which you can show if asked about it at a later date.
You must inform your Home, Building and Contents and Car insurance company once you have been approved as a foster carer.
Tell them about the numbers of children and age ranges you expect to take. You should ask the insurance companies for written confirmation that they have included foster children on your policies. A copy of these letters should be given to your Supervising Social Worker.
All foster carers registered with Solihull MBC receive free membership to 'The Fostering Network' who have a range of resources to help foster carers better understand what fostering means for them and their finances. These include FAQs and a tax video explaining issues such as Qualifying Care Relief, calculating your taxable profit, registering with HMRC and more.
You can also register for upcoming tax webinars that include the opportunity to listen to a presentation by Foster Carer tax experts. The webinars include the opportunity to ask questions.
Please speak to your supervising social worker if you are unsure how to access these services.
Last Updated: November 12, 2024
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