Money Matters and Insurance

Contents

1. Introduction
2. Income Tax
3. Claiming Benefits While Fostering
4. Pensions
5. Receipts
6. Insurance

1. Introduction

Once you have completed the preparation training and the National Standards for Foster Carers 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.

Payments to foster carers are currently under review.

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. Income Tax

Tax exemption

There’s a fixed tax exemption of up to £10,000 per year (less if for a shorter period) which is shared equally among any foster carers in the same household. This means you don’t have to pay tax on the first £10,000 income you make from fostering.

Tax relief

On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you don’t have to pay tax on some of your earnings over £10,000.

Age of Child	Tax Relief
Under 11	£200 per child
Over 11	£250 per child

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

Please see: Foster Carers Relief Information (HMRC).

3. Claiming Benefits While Fostering

See relevant information on the GOV.UK website.

4. Pensions

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

5. 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.

6. 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.