Fostering Fees and Allowances
As soon as you an approved foster carer with TACT and begin caring for a young person, you will immediately receive a fostering allowance. For almost all foster carers, this allowance will be tax free and will not affect benefits you’re currently receiving.
How much is the fostering allowance?
The total fostering allowance will vary based on a number of factors, including the type of foster care you are providing, the age of each child and the complexity of their needs.
We can provide you a comprehensive breakdown of our fostering allowances and fees here.
What does the fostering allowance cover?
The payment you receive from TACT will be made up of two elements:
- The maintenance allowance for each child you care for
- The foster carer fee
The maintenance allowance covers the costs of everything that you need to care for a child such as food, clothing, transport, personal items and household expenses. The fee part of the payment is effectively your salary for the time and skill dedicated to foster caring.
In addition to the fees and allowances, you will also be entitled to a range of extra payments covering everything from a birthday allowance and festival allowance to buy gifts for your foster child to holiday allowances and some additional travel costs.
Tax and Foster Carer Pay
As a foster carer, you are classed as self-employed and are paid on a fortnightly basis, while you have a child in placement. It is important to consider that you will not be paid any fees or allowances for any period that you do not have a placement.
As part of the application and assessment process we will discuss your financial circumstances and how you will cope during periods without a placement.
As a foster carer your earnings will be subject to special tax arrangements which in most cases mean that you will pay very low, if any tax on your income from fostering. There’s a fixed tax exemption of up to £10,000 per year which is shared equally among any foster carers in the same household. This means you don’t have to pay tax on the first £10,000 income (after expenses) you make from fostering.
On top of the £10,000 exemption, you also get tax relief of up to £250 per week for each child in your care. This means if you have a child over the age of 11 in your care for a whole year you wouldn’t pay tax on your earnings up to £23,000.
If you currently receive benefits, these may still be paid alongside your fostering payments. Click here for further information about working out your taxable income and eligibility for claiming working tax credit. Please note the minimum fostering allowance rates are quoted by the gov.uk on the link above – TACT pays foster carers a more competitive fee than what is stated on the gov.uk website.