Both independent fostering agencies and local authorities pay foster carers a weekly fostering allowance which covers things like food, clothing, pocket money, transportation and other household expenses.
Here at Olive Branch, we understand that fostering can be quite demanding at times and is a full-time, professional career, that’s why we pay our foster carers a generous weekly fostering allowance that helps to support the foster child and acts as a reward element, so they can focus on giving their foster child the best possible care.
Our weekly allowance payments will vary depending on the needs and age of the child, as well as the number of children you care for, but as a foster parent, you can expect to receive up to £405.00 per child per week.
Caring for children or young people in your home is a rewarding and worthwhile profession and independent agencies will make sure that you are fully supported during your career as a foster carer.
By working as a professional carer you will be classed as being self-employed, which means you will enjoy allowance payments without any deductions for national insurance and tax. You will, however, need to register with the HMRC as self-employed and complete a yearly tax return.
The Government also has a special tax relief for all foster carers and their families. The first £10,000 you earn (after expenses) is 100% tax-free. On top of this, there is an extra weekly tax relief available to you of £200 (for children under 11) and £250 (for children over 11) that you earn for every week you are fostering a child.
More information can be found on the gov.uk fostering website here.
Below we have given you some examples of fostering income based on a child placement of 52-weeks of the year.
Tracey is fostering a 14 year old boy and is paid £390.00 per week.
Earning for the year= 52 x £390.00= £20,280
Tax Exemption= £10,000
Further Tax Relief= 52 x £250= £13,000
Total Tax Relief Eligible= £23,000
Therefore 100% of earnings are tax free and Tracey does not pay any tax.
Mathew is fostering a sibling group of 2, one child is 9 and the other is 16. Mathew is paid £740 per week.
Earning for the year= 52 x £740.00= £38,480
Tax Exemption= £10,000
Further Tax Relief= 52 x £200= £10,400 (under 11 child)
Further Tax Relief= 52 x £250= £13,000 (over 11 child)
Total Tax Relief Eligible= £33,400
Therefore Mathew will pay tax on £5,080
Fostering allowances are not considered income in regards to most means-tested benefits that you might be eligible for. This includes:
- Job Seekers Allowance
- Income Support
- Council Tax Reduction
- Disability Living Allowance
- Housing Benefit
- Working Tax Credits
You will still need to declare your fostering allowance when you apply for any of these benefits.
Contact your local council to enquire about what housing benefits you are entitled to if you are caring for foster children in your home. These additional payments can help make the fostering process easier and reduces any money issues.
Council tax reduction
Additionally, you may be eligible for a council tax reduction depending on your circumstances and the number of people living in your house. Each local council sets its own eligibility criteria for this scheme.
Fostering with Olive Branch comes with other benefits as well as the fostering allowance. We are available to provide 24/7 support via our helpline, an assigned social worker to provide additional support, we provide full training to help you begin your fostering career and you gain access to the fostering network and all of their excellent resources.
We want to help you make the home environment as comfortable and happy for your foster children as possible, and for you too.
If you have any questions or are interested in becoming a foster carer with Olive Branch then please fill in our enquiry form on our Contact Us page, or call us on 01706 552910.