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Fostering Allowance

Fostering allowances are a crucial aspect of the fostering system in the UK, ensuring that foster carers have the financial resources to provide a stable, nurturing environment for the children and young people in their care.

These allowances cover day-to-day expenses, ensuring that foster carers can meet the needs of children and focus on their well-being.

Fostering allowances are intended to cover costs such as:

• • Food, clothing, and toiletries
• • Educational resources, including school supplies and books
• • Transport for school, medical appointments or leisure activities
• • Utilities, household expenses and any additional costs for the child’s care

How much is the Fostering Allowance?

Understanding Foster Carer Payments

Foster carer payments are divided into two elements:

1. Allowance Element

This covers the child’s living and daily expenses, such as:

• • Food and clothing
• • Utilities and transport
• • Pocket money and leisure activities
• • Holiday and outing costs

2. Reward Element

This part recognises fostering as a professional career. Whether you foster full-time or alongside another job, this portion is your income. The reward element can exceed £20,592 annually when fostering two children for a full year.

Tax exemption and relief

In a tax year, your household will not pay tax on the first £19,360 they earn from fostering. You’ll still pay tax on money you earn from a job or investment.

On top of the £19,360 exemption, you also get tax relief for every week (or part week) that a child is in your care.

This means you do not usually pay tax on your earnings from foster care, even if they go over £19,360. Visit the HMRC website for more information on tax relief for foster carers.

Get in touch

If you have any questions about the fostering allowance, don’t hesitate to contact our friendly team.