Money Matters and Insurance

Once you have completed the preparation training and the fostering induction standards and have a child placed with you, you will receive at least the minimum fostering allowances listed in the tables below. Allowances are usually made up of two components. The basic age related child allowance and the competence payment relating specifically to the foster carers tier level within the progression scheme.

If you have any queries about allowances or if you think you have been under or over paid, contact the finance section in the fostering service as soon as possible.

Payments to you are made in arrears, direct to their bank or building society.

For further information please see Foster Carers Handbook Finance Matters.

Click here for the national minimum fostering allowances.

The national minimum allowances are only the base minimum rates. The actual allowance that you will receive will depend on a number of factors, in particular the specific needs of the child. You may also get paid in recognition of your skills, commitment or time. Fostering agencies may make one payment to cover both of these.

While a child is Looked After, they are entitled to a number of other allowances.

The level of these payments is reviewed once a year.

For further information please see Foster Carers Handbook Finance Matters.

This is provided in the payment to foster carers but any school trips or special holidays will be considered by the Fostering Agency on a case by case basis.

A foster carer will pay a minimum of 4%** of their carer pay into their Respite Fund. This represents 2/52 (i.e., two weeks’ respite out a fifty-two-week year), or pro-rata higher % if the placing local authority’s terms and conditions dictate longer respite should be paid.

Normally, the fostering Service accrues carers’ Respite Fund throughout the respite year, and pays it in the following July. This then provides funds for foster carers to take a summer break, or fund activities for their child(ren)/young person(s) during the summer school holidays.

In exceptional circumstances, a placing local authority may agree that respite is needed for the children (rather than for the carers). The Fostering Service will request that the placing authority pay an additional amount to cover such respite.

Please discuss any issues with your supervising social worker.

With respect to a child’s/young person’s allowances for clothing, mobile phone, pocket money, personal care, savings, birthday and festival allowances and holiday cost expectations, different local authorities have different minimum expectations. Sometimes these are age-banded, sometimes not. The placing local authority should make these expectations clear at the first placement planning meeting, and those allowances should be agreed by all parties and documented at that meeting.

Carers should aim to have a clear understanding, for each child/young person placed, of the items the child/young person is responsible for out of the money they receive. Carers should discuss this matter with their supervising social worker and the placing authority’s social worker, as well as the child/young person concerned, so that expectations are shared.

Pocket money has a special place. It is given to foster children (and children generally) to spend (subject to constraints around legality and moral boundaries) when and how they wish. It is intended that it should be given to the child/young person weekly.

Pocket money does not include allowances for clothing, personal care, travel, telephone, entertainment/leisure activities, and it may be appropriate, depending on the circumstances, to give money for these amounts in a larger weekly cash sum.

If there are concerns about how the money is spent these concerns should be discussed with the child/young person and the social worker. If there is a serious risk, the arrangements for providing money may have to be restricted, or supervised spending arrangements put in place. This should always be discussed and agreed with the child's social worker.

Deductions from pocket money should not be made for fines or sanctions unless agreed with the child’s social worker, except for reparation of malicious damage or to pay fines determined by a court. If a court imposes such deductions or fines, no more than two thirds of a child's pocket money should be deducted in any week.

Clothing money and allowances for personal care, etc. are different from pocket money, as they should be spent on those costs. For this reason, it may be sensible for the foster carer to accompany a foster child when shopping for clothes or be sure in some other way how the money is spent, e.g., by seeing receipts. If some of these allowances is not spent in any given week, the remaining amount should be saved so that “large ticket” items can be bought at a later date.

A proportion of a child’s/young person’s clothing allowance should be saved for the purchase of their school uniform, particularly where it’s known that they will be moving schools in the future (e.g., progressing from primary to secondary school).

For further information please see Foster Carers Handbook Finance Matters.

Foster carers should not pay markedly different amounts of pocket money and allowances to the child(ren)/young person(s) in their care than they do to their birth children.

This is included in the weekly amount paid to carers. it is up to the foster carer to budget for Christmas and other festivities.

This will be provided in the weekly amount paid to foster carers.

Expenses are paid by the fostering service for making trips to hospital; attend reviews, contact arrangements or other exceptional travel expenses. This will be at a set rate per mile.

For further information please see Foster Carers Handbook Finance Matters.

Discuss with your Supervising Social Worker, any requests for specialist equipment.

When a child first arrives there may be a need for extra money to buy clothes. Please discuss this with your Supervising Social Worker.

The cost of getting birth certificates (and copies), passports and Life Story books will be met by the fostering service.

Information is also available from the GOV.UK website about passports.

When you are fostering, you will need to be registered as self-employed and file tax returns. See File Your Self Assessment Tax Return Online.

You will be entitled to qualifying care relief which means that you will be entitled to:

See relevant information on the GOV.UK website.

If you foster you may be eligible for National Insurance Credits which count towards your State Pension.

You should keep a record of how the allowance is being spent on a child/young person. You should keep receipts where possible. The child/young person should sign for money they are given e.g. pocket money and clothing allowance. This helps build a record of what has been spent, which you can show if asked about it at a later date.

You must inform your Home, Building and Contents and Car insurance company once you have been approved as a foster carer.

Tell them about the numbers of children and age ranges you expect to take. You should ask the insurance companies for written confirmation that they have included foster children on your policies. A copy of these letters should be given to your Supervising Social Worker.