Financial arrangements of a foster carer

We provide foster carers with fostering allowances. These are made up of two elements; the first is an allowance that pays for the child or young person’s upkeep while they live with you, and the second is a fostering fee solely for the foster carer/s. 

A breakdown of the allowances is contained in the foster carer’s agreement and is updated annually.

Fostering Allowances Current Rates 2023/2024 (revisited 1st April every year)

Payment of allowances

We ask all foster carers to complete a bank mandate form so we can pay these allowances directly into their bank account on a fortnightly basis. Rates are reviewed periodically and we will notify you about updated rates. Foster carers are also entitled to 14 nights of paid respite per year and this will not affect their allowances. 

Ending payment of allowances

When a fostering placement ends, the fostering allowance ceases on the day the child leaves the placement.

Travel claims

The fostering allowances provide £13.66 per week to cover travel expenses associated with a child or young person placed with you. This covers the costs of everyday activities such as going to local clubs, school, medical appointments etc. If you incur travel for a child or young person over and above 50 miles, you may be able to claim the cost of the additional mileage. This will be paid at 45 pence per mile.

Emergency Placement Needs – Clothing

Children who go into foster care in an emergency may not have adequate clothing.  Under these circumstances, it is the responsibility of the child’s social worker to ensure that foster carers receive money for clothing. This is made on a discretionary basis and should only be requested if the child arrives in placement with no clothing and it is clear that the child’s clothing and belongings will not be available to the foster carer from the child’s parent(s). If you do feel you have to purchase clothing before you have received the fostering allowances, please discuss this with the child’s social worker first.

Once you receive the fostering allowances it is your responsibility to ensure the child has suitable and sufficient clothing and footwear.

Should you be in any doubt about the clothing you have to purchase, please discuss this with your supervising social worker. However, the general principles should be:

• Separate clothing for school, leisure, nightwear, and a variety of weather conditions
• Children’s feet should be measured before buying shoes of any kind, including training shoes.
• Children should not have ‘hand-me-downs’ or clothing purchased from charity shops.

When a child leaves placement their clothing should at least meet minimum requirements. If the child has been in your care for over three months, they should have a full complement of up-to-date clothing and footwear, in good condition.  Carers need to show that all children in their care have plentiful changes of clothing and that children are encouraged to take part in choosing their clothing (where age-appropriate).

Hire Purchase

Foster carers should not sign any hire purchase agreements on behalf of teenagers in their care as they may be held responsible for the debt if a young person fails to pay.

Income Tax / National Insurance

Foster carers are treated as self-employed for taxation purposes.  Her Majesty’s Revenue and Customs expects that all income is declared and foster carers are required to register as self-employed with HMRC.

HMRC has produced a self-instruction on-line pack.

All foster carers are required to register as liable to pay national insurance contributions within three months of starting work.  You may be fined if you fail to do so.  Registration does not automatically mean you have to pay National Insurance contributions, as you may be eligible for an exemption.  The tax office will also give you the required information – ask for a leaflet concerning tax and self-employment.  However, please note, it is not the responsibility of the tax office to notify your self-employed status to the NI contributions office.  They work separately, and it is your responsibility to ensure that you have filled in the necessary documentation for both tax offices.

Legal advice

Foster carers can be held liable for injury to the fostered child.  In extreme circumstances, they may require legal representation, for instance, if allegations result in charges being laid against them. We subscribe to the Fostering Network on behalf of all foster carers, and this entitles them to receive free legal advice.  They may also benefit from the Fostering Network’s legal expenses scheme, which pays costs incurred as a result of any criminal prosecution brought against an individual or family member whilst acting as a foster carer.  Civil claims are not generally covered by the policy.

Household Insurance

It is the foster carer's responsibility to inform their home insurance provider that they are fostering and to ensure that they have a policy that covers both accidental and malicious damage caused by a young person within their home.  The Fostering Network provides information on providers who offer specific foster care insurance. We do not provide insurance against risks associated with the placement of young people in carers’ households and the council will not be held responsible or liable for any loss, damage, or injury resulting from the placement.

Car Insurance

Foster carers must inform their car insurance company that they foster and arrange suitable cover.  The insurance policy must be fully comprehensive and include business use.  Foster carers will be required to show their insurance documents, MOT and driving licence to their supervising social worker every year.  This is also a requirement of the Foster Care Review.