How much will I be paid as a foster carer?
We know that money isn’t the main motivation for fostering, but we believe that the hard work and dedication of our foster carers deserves to be recognised. One of the ways we do that is through a fostering allowance that is significantly higher than the recommended national minimum, as well as a number of other financial benefits. We don’t want money to be a barrier to anyone wanting to begin a career in fostering.
The amount you’ll be paid is a combination of your fostering allowance and a number of other additional payments. Many foster carers don’t have to pay income tax as they get ‘qualifying care relief’, which means you take home more of your money!
Since April 2003, all foster carers have been treated as self-employed and this means you will receive a fostering allowance, rather than a salary. This allowance is to cover the costs associated with the care of the child, such as food, clothing and pocket money, as well as a fee for your professional services as a foster carer.
At Tree House Care we recognise the skills of our foster carers by having one high rate of pay for everyone. We don’t discriminate based on the ages of the children cared for or the number of years of experience you have, as we trust that all of our carers provide the same outstanding level of care. The exact amount you’ll receive will depend on the number of children in your care, but on average our foster carers receive around £503 per child per week (as of February 2023).
On top of your fostering allowance, we make a number of additional payments throughout the year. This can include Christmas and birthday allowances, pay-to-train payments, mileage payments, long-service awards, recommend-a-friend rewards and one-off payments such as the £150 energy payment we made in October 2022.
As a foster carer, you will need to register as self-employed with HMRC to file a tax return each year and make National Insurance contributions towards your state pension. Although this may seem daunting if you’ve not done it before, we’ll be on hand to point you in the right direction to get advice! The government has also produced a handy online guide to talk you through every aspect of tax and national insurance for foster carers.
When you are a foster carer, you’ll be entitled to ‘qualifying care relief’, which means that you can:
- earn £10,000 from fostering before you have to pay tax
- get tax relief for every week you foster a child
This means that as a household, you won’t pay tax on the first £10,000 earned from fostering, and will also not have to pay tax on some of your earnings over £10,000, based on the age and number of weeks you’ve had a child in your care.
Laura is a foster carer for a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. She does not have to pay tax on the first £25,000 she earns from fostering:
Tax exemption = £10,000 + Child 1 (52 x £250) = £13,000 + Child 2 (10 x £200) = £2,000
Total = £25,000
This means that you get to take home more of your money, and many carers find they don’t have to pay any tax at all!
As a self-employed foster carer, you’ll still be eligible to claim most state benefits and any means-tested benefits won’t class your fostering allowance as income. You’ll be able to claim child benefit for your own children, but not for any child you’re receiving fostering allowance for.
We understand that this can all seem a bit confusing at first, so please get in touch with us if you have any questions at all. We’re also always happy to put you in touch with our existing foster carers who can explain how the system works for them.