Little Acorns recognises the challenges of the fostering task and the vital role that foster carers play within the community.

We firmly believe in treating our foster carers as child care professionals and making sure they have all the right resources including an allowance to fulfil the task.

How much are the foster care payments?

Our carers receive a standard weekly fostering allowance of £400 per week per child in care. Depending on the needs of the child and their circumstances, additional allowances are available which can increase the allowance to £600 per week. Parent and Child fostering starts from £630 per week.

Tax relief

Fostering is classed as self-employment and there are generous tax allowances available to help. The important thing to remember is that each individual’s financial circumstances are different.

As a foster carer, you are given a fixed tax exemption of £10,000 per year, on top of your standard personal allowance of £12,500 which means you have a total fixed tax allowance of £22,500.

In addition, you also receive further tax-free exemptions of;

  • £200 per week for child placements under the age of 11
  • £250 per week for child placements aged 11 or over

Case Study

Mr and Mrs Smith foster a sibling group of two for a year, one aged 8 the other aged 11. Mr Smith works full time and Mrs Smith is the main carer. Mr Smith utilises his personal allowance against his earnings.

The household receives a basic allowance of £10,000 as a fostering household, plus Mrs Smith benefits from a £12,500 personal allowance.

They also benefit from tax-free allowances for the 11-year-old of £13,000 and for the 8-year-old £10,400

Therefore, Mrs Smith receives a total tax-free allowance of £45,900

Mrs Smith receives a fostering allowance of £41,600 which is below the tax-free allowance, and therefore no tax is payable.

This is equivalent to earning £56,800 per annum before tax.

What do the payments cover?

The payment to carers is provided to cover household costs, food, clothes, travel, school dinners and all the things you would reasonably expect when looking after a child.

Being a foster carer is no longer seen as a voluntary service. Foster carers need to be sufficiently funded to ensure the young person in care gets all the opportunities they would otherwise. Our fostering allowances enable foster carers to care for children and young people on a full-time basis.

National Insurance contributions

Carers are entitled to Home Responsibility Protection – a way to make sure that you do not get less Basic Retirement Pension because you decided to look after children at home.

In receipt of Benefits?

Any payments paid to foster carers for fostering is generally not taken into account and does not affect Benefits. However, you would not be able to claim Child Tax Credit or Child Benefit for a child if you are in receipt of a fostering allowance.

Foster carers may be in a position to claim any of the following benefits:

Income Support

Income-Based Job seeker’s Allowance

Housing Benefit

Council Tax Benefit

Disability Living Allowance

Working Tax Credits