Money Matters and Insurance

Contents

1. Introduction
2. The National Minimum Allowance Rates
3. Allowances
4. Holiday Allowance
5. Pocket Money
6. Christmas/Festival Allowances
7. Birthday Allowance
8. Travel Expenses
9. Equipment
10. Initial Clothing Allowance
11. Passports and Documents
12. Income Tax
13. Claiming Benefits While Fostering
14. Pensions
15. Receipts
16. Insurance

1. Introduction

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.

2. The National Minimum Allowance Rates

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.

3. Allowances

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.

4. Holiday Allowance

This can be applied for once a year. You should let your Supervising Social Worker know when you plan to take a child/young person on holiday and they will arrange payment. The amount payable depends on the age of the young person.

5. Pocket Money

Local Information - to follow

6. Christmas/Festival Allowances

This should be included in the first payment in December or the relevant month if another festival is celebrated.

7. Birthday Allowance

This should be made with the payment immediately before the date of the child's birthday.

8. Travel Expenses

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.

9. Equipment

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

10. Initial Clothing Allowance

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

11. Passports and Documents

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.

12. Income Tax

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:

Tax exemption

In a tax year, households do not pay tax on a fixed amount of the money they earn from fostering. You will still pay tax on money you earn from a job or investment.

Tax relief

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

All payments made to you will be itemised. You should keep this information as a record for income tax purposes.

For further information and current figures, please see: Foster Carers Relief Information (HMRC) and Help and Support for Foster Parents in England.

13. Claiming Benefits While Fostering

See relevant information on the GOV.UK website.

14. Pensions

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

15. Receipts

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.

16. Insurance

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.