You will be paid a weekly amount for each child that you care for and this varies depending upon the age and need of each child. This amount has two components, the allowance to care for the child’s needs e.g. food, clothing, leisure etc. and a fostering fee for you.
Being a Foster Carer is recognised by the HMRC as self-employment. This status comes with its own generous tax benefits that can really make a difference to Foster Carers. Most carers find that they pay little or no tax. You will find more information about fostering on HMRC website.
Payment is different for each placement depending on the child’s age and need and whether they’re part of a sibling group. The examples below will give you an idea of how this works and the typical amounts available.
The threshold for the Foster Carer Tax Scheme (which applies to the vast majority of carers) is £10.000.00 per year.
There is an additional amount of £200.00 per week for every child that you care for aged 0-10 years old and £250.00 per week for a child aged 11-18 years old.
Example: for illustrative purposes only and are based on a 52-week placement.
Ms X is a foster carer looking after three children aged 6yrs, 11yrs, and 14yrs for the entire tax year. Her qualifying amount is calculated by adding together the fixed amount of £10.000.00 plus a weekly amount of £200 plus £250 plus £250.00 respectively. This gives her a tax threshold of £49.000.00.