Foster carers are considered to be self-employed individuals for the purposes of registering with the Inland Revenue (see more details about this below). Foster carers receive fostering allowances, which are comprised of two elements; the first is an allowance that pays for the child or young person’s upkeep whilst they live with you, and the second is a fostering fee solely for the foster carer/s. The breakdown of the allowances is contained in the foster carer’s agreement and requires updating annually.
Fostering Allowances Current Rates 2023/2024 (revisited 1st April every year)
0 – 10
11 - 18
Clothing & footwear
Pocket money & leisure
Training & meetings
Insurance/wear & tear
Birthday & religious festivals
Payment of Allowances
Foster carers complete a bank mandate form on approval as foster carers. The allowances are paid directly into the foster carer’s bank account on a fortnightly advance basis. Rates are reviewed periodically and foster carers will be notified about updated rates. Foster carers are allowed 14 nights 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. The supervising social worker is responsible for notifying the Finance Section when a placement comes to an end. As payment of fostering allowances are made in advance, there may be overpayments to foster carers, which will be reclaimed by the Finance team, usually through the adjustment of subsequent payments.
The fostering allowances provide for £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 the local brownies, school and dentist, for example. If you incur travel for a child or young person over and above 50 miles the cost of the additional mileage may be claimed for and will be paid at 45 pence per mile.
Emergency Placement Needs – Clothing for children and young people
Children that are accommodated 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 are provided with money for clothing, which will be made on a discretionary basis. This 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 and it may be agreed that if you can buy clothing for the child, the cost will be reimbursed to you if you provide all relevant receipts.
Once you are in receipt of 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 that you have to purchase, please discuss this with your supervising social worker. However, the general principles should be:
- The provision of adequate and 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, it is the expectation that 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).
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 require 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.
Foster carers need to be aware they 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. Argyll and Bute Council subscribes 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.
It is the responsibility of all carers to inform their home insurance provider that they are fostering and to ensure that they have a policy that covers for 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. Argyll and Bute do not provide insurance against risks associated with the placement of young people in carers’ households and the service will not be held responsible or liable for any loss, damage or injury resulting from the placement.
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.