Money Matters and 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 Foster carer competence/skills payment.

Detailed information about Foster carer payments in Hertfordshire can be found in the Foster carer payment document: Foster carer payments (Hertfordshire County Council)

If you have any queries about allowances or if you think you have been under or over paid, contact your Fostering Team as soon as possible.

Payments to you are made, direct to your bank or building society.

2. The National Minimum Allowance Rates

Click here for the national minimum fostering allowances.

All Hertfordshire County Council foster carers receive the national minimum fostering allowance; this is paid to foster carers to cover all costs in relation to looking after children and young people. The Hertfordshire Fostering Allowance is linked to the Department of Education National Minimum Fostering Allowance (South East Rate).

3. 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.

4. Claiming Benefits While Fostering

See relevant information on the GOV.UK website.

5. Pensions

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

6. 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.

7. 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.