Financial assistance when fostering
Financial assistance when fostering
As well as an excellent package of support we offer foster care allowances that can amount to over £450 per week. How this breaks down to your own situation will be discussed further during your assessment. In the meantime please see below for further guidance on other financial items that may apply to you.
If you receive at least the middle rate of the care component of Disability Living Allowance for a foster child, then you may be able to receive carers allowance. You will need to be regularly caring for the child at least 35 hours per week and you must not have an income of more than £77 per week. Foster care allowances are not included in this.
You cannot receive this for any child who you are receiving a foster care allowance for.
Children’s tax credit
You can only claim for your own children. Some of your fostering allowance may be counted as income if it is taxable.
Disability living allowance
You can claim this for yourself and for any disabled foster child you are looking after.
Employment and support allowance
You can claim this if you are fostering, but the Department of Works and Pensions may regard fostering as an indication that you are able to work. You should seek advice and consider appealing if it becomes a problem.
Housing benefit and council tax
You can continue to claim housing benefit and council tax benefit, and your fostering allowance will not be counted as income. If you have no children in care, then fee payments you receive may affect your housing benefit and council tax benefit.
You can claim income support if you are the sole foster carer or are looking after your own children who are under seven. Foster allowances, including any reward elements are not counted as income, but no personal allowances can be claimed for foster children. If you receive a fee payment when you have no children in care, these are treated as income and you should inform income support. Any earnings from a job other than fostering, count as income and may reduce your entitlement.
Job seeker’s allowance
Contribution-based job seeker’s allowance is not generally affected by fostering allowances. However, you need to be working less than 16 hours per week and have a current jobseeker’s agreement. You must show that you are still available for and actively seeking full-time work. The Department of Works and Pensions could find that your fostering duties prevent you from meeting the qualifying conditions and you may lose entitlement to job seeker’s allowance.
Income-based job seeker’s allowance requires you to be available for, capable of and actively seeking work. The rules are the same as for claiming income support.
National Insurance credits for carers
Foster carers are self-employed and responsible for making their own National Insurance contributions. You only have to pay National Insurance on your fostering allowance if it exceeds the foster carer tax relief exemption. If you claim income support, job seeker’s allowance or employment and support allowance, then your National Insurance record is credited to you.
If you don’t claim these benefits and none of your income is taxable, you need to apply for National Insurance credits from HMRC. It is important to keep your National Insurance record up to date, to protect your State Retirement Pension.
You can claim under the same rules as income support. However, the pension age of women is increasing, so you should check what qualifies as pension age at time of your claim.
You can receive the first £10,000 in fees, as well as allowances up to £200 for a child under 11 and £250 for a child over 11 each week that you care for them. You may pay tax on anything above this if you have used your tax-free allowance of £8,105.
As a self-employed person, you must pay your own tax and National Insurance. An accountant can help and you should seek guidance from HMRC.
Working tax credit
You can claim this as the sole foster carer or as a couple. You must be over 25 and work (including fostering) at least 30 hours a week. You need only work 16 hours per week if you look after your own children. Fostering allowances only count as income if they are taxable.