How much is the Fostering Allowance?

Little Acorns: Supporting Foster Carers Every Step of the Way

At Little Acorns, we understand the challenges of fostering and the vital role that foster carers play in transforming young lives. We are committed to treating our foster carers as professionals. We ensure they receive the necessary support, resources, and financial allowances to provide the best care possible.


Foster Care Payments

Our foster carers receive a standard weekly fostering allowance of £440 per child. The allowance can increase up to £900 per week, depending on the child’s needs and the type of fostering placement.

For those providing Parent and Child fostering, allowances start from £700 per week.


Tax Relief for Foster Carers

Fostering is self-employment, and generous tax allowances are available. Each person’s financial situation is different, so professional guidance is recommended.

Foster carers benefit from a fixed tax exemption of £18,140 per year, plus the personal tax allowance of £12,570. This gives a total tax-free threshold of £30,710 per year.

Additionally, carers receive more tax-free allowances for each child:

  • £375 per week for children under 11
  • £450 per week for children aged 11 and over

Case Study: Understanding Tax-Free Income

Mr. and Mrs. Smith foster two siblings for a full year (one aged 8, the other 11). Mr. Smith works full-time, while Mrs. Smith is the primary foster carer. Mr. Smith uses his personal tax allowance for his earnings.

The household benefits from:

  • A standard fostering tax exemption of £18,140
  • Mrs. Smith’s personal tax allowance of £12,570
  • Tax-free allowances for the children:
    • £23,400 for the 11-year-old
    • £19,500 for the 8-year-old

Total tax-free allowance: £73,610

Mrs. Smith receives a fostering allowance of £45,760, which is below the tax-free allowance. No tax is payable.

This is equal to earning about £64,000 per year before tax in a standard job.


What Do Fostering Payments Cover?

The fostering allowance covers all child-related costs, such as:

  • Household expenses
  • Food and clothing
  • Travel and transport
  • School meals and learning resources
  • Activities and hobbies

Fostering is now a professional role, not just a voluntary service. Carers need financial support to provide children with the same opportunities as others.


National Insurance Contributions

Foster carers qualify for Home Responsibility Protection. This ensures they do not receive a lower Basic State Pension due to their caregiving role. Carers may also get National Insurance credits to protect future benefits.


Fostering and Benefits

Fostering allowances are not counted as income for most benefits. However, carers cannot claim Child Benefit or Child Tax Credit for a foster child.

Eligible benefits include:

  • Income Support
  • Income-Based Jobseeker’s Allowance
  • Housing Benefit
  • Council Tax Support
  • Disability Living Allowance
  • Working Tax Credit

If you receive benefits, check with your local authority or a financial advisor to understand how fostering may affect them.


At Little Acorns, we value and support our foster carers. We provide everything needed to create a stable, loving home for children in need. If you’re considering fostering, contact us today!