ALL ABOUT FOSTERING ALLOWANCE / FOSTER CARE PAY / FOSTER CARER TAX BENEFITS
Sunbeam offers up to £700 fostering allowance per child per week depending on children’s needs. Additionally, we pay other allowances and our foster carers receive many other benefits while fostering with us. We welcome foster carers from a diverse range of backgrounds and all ages. We would welcome you to take the opportunity to speak to one of our existing foster carers to hear this first hand.
One Child
- 1 Additional Needs
Two Children
- 1 Mainstream
- 1 Additional Needs
Parent and Child
- Parent
- Child
Sunbeam is offering generous fostering allowances to all foster carers. We are also providing excellent help and support for our carers to help children in need.
If you are fostering one child up to £41,540 is tax free and if you are fostering two children then up to £57,140 is tax free. If you are fostering more children then more income will be tax free.
Sunbeam offers up to £700 fostering allowance per child per week depending on children’s needs. Additionally, we pay other allowances and our foster carers receive many other benefits while fostering with us. We welcome foster carers from a diverse range of backgrounds and all ages. We would welcome you take the opportunity to speak to one of our existing foster carers to hear this first hand.
Please note the above mentioned allowances are an indication of Sunbeam weekly payments made for each placement type. All allowances vary as each placement is assessed on an individual basis. Fostering Allowances are correct at time of publishing and may be subject to change. Please talk to a member of Sunbeam Fostering team to discuss how the our allowances could work for you. For current tax free allowances, please see the HMRC website.
Understand the detailed breakdown of Fostering allowance
How much do you get paid exactly for fostering?
Foster carer payment
Looked after children and young people have many different needs and complexities. At Sunbeam Foster Carers receive a carer payment which reflects the needs of the child or young person they are caring for. Payment rates, therefore, can be up to £700 per week can per child for complex needs. At Sunbeam we welcome all foster carers who are considering being a part of the Sunbeam Family, with this ethos engrained within our service, the carer payment is just one of the ways by which we seek to support foster carers and children and young people.
Understanding the foster carer payment
What is the payment for?
The foster carer payment is in place to ensure there is no financial implication to the foster carer in regards to the care of the child, so the only investment foster carers need to make is that of time, love, and support.
Allowance and reward element
| Allowance | Reward element* |
| £26,208 | £20,592 |
| £46,800 Total Carer Payment | |
(figures based on carer payments in 2023-24, when caring for up to 2 children (16+) for a full year (52 weeks).
*See tax / HMRC
We refer to the full payment to foster carers as the fostering allowance or foster carer payment, however, this is broken down into two parts
The allowance element covers daily and living costs to care for a child or young person, this includes but not limited to:
- Food
- Clothing
- Utilities
- Transport
- Pocket money
- Outings and activities
- Holiday costs
The reward element enables foster carers to be paid for their work because fostering is a professional career, whether you work alongside fostering or are a full-time foster carer, the reward element is your income. This means that the income generated from fostering could be in excess of £20,592 (figures based on carer payments 2023-24 when caring for up to 2 children (16+) for a full year (52 weeks).
At Sunbeam we share detailed carer payment information with approved foster carers annually, we review and align our carer payments with the needs of the children and young people so there is always flexibility around this to ensure foster carers are actually supported financially and can focus on what’s really important – caring for the child.
As a foster carer, you will receive fostering allowance which normally covers things like food, clothing, transportation, pocket money, outings, and personal household expenses, etc. Sunbeam offers up to £700 fostering allowance per child per week depending on children’s needs. Additionally, we give generous bonuses and foster carers receive other benefits while fostering with us.
Receiving Fostering Allowance
So you are considering becoming a foster parent but are wondering how you are going to afford it and what will be paid to you as fostering allowances as it can be an expensive job. No need to worry, there is plenty of help available to foster parents to help cover the costs of fostering children and as a reward element, a weekly fostering allowance is paid to foster carers which of course depends on children’s needs.
Once thought of as a voluntary occupation, providing foster care is now considered to be a professional career and it is generally accepted that fostering is a full-time occupation. As with any recognised profession, foster carer’s allowance and fostering fees for approved foster carers with Independent Fostering Agencies (IFAs) are now quite competitive.
Caring for children in your home, you will incur not only the basic costs of food, clothes, toys, and utilities. There are trips out, pocket money, and a whole host of other expenses that pop up where children are concerned. The fostering allowance is not only there to help you cover these expenses but also to compensate you in the process.
“Sunbeam Fostering Agency is one of the largest and most progressive independent fostering agencies in England, we have registered offices in Langley, Luton, Coventry and resource centres in Portsmouth, Northampton, Nottingham, Birmingham, Wembley, Walthamstow, Blackburn and Croydon to make it easier for all our foster carers”
Type and amount of fostering allowance
The type and amount of fostering allowance that you receive will depend on the type of foster care that you provide as well as who you work for:
Local Authority Foster Care
If you are fostering children via your local authority you will be paid the foster carer’s allowance according to the criteria they set. Foster carer’s allowance varies in each local authority but the rate set by the government starts at £123 per week for babies, right up to £216 per week for 16-17 year olds with an enhancement for London and the South East of England. These are the standard recommended rates and depending on the circumstances, you are likely to receive higher foster carer’s allowance than this.
Independent Fostering Agencies (IFA’s)
Independent fostering agencies pay fostering allowances in a slightly different way; foster parent working with an independent agency will receive a fostering fee of up to £700 per child per week although this will vary according to the needs of the child that is placed, for example:
- Parent and Baby
- Remand Fostering
- Children with complex needs
Private Fostering
Where a private arrangement has been made between a parent and a foster parent, the responsibility for any foster fee or allowance falls to the parent. In this circumstance the foster carer is responsible for claiming the correct benefits for the child like tax credits and housing benefit. There is no state remuneration or fostering allowance payable in this case.
Tax records and relief
Working as a Foster Carer & having Fostering Payments means you are classed as self-employed. Foster carers are classed as self-employed, this means that you will receive all the payments with no deductions for national insurance or tax. You, however, will need to register as self-employed with the HMRC and complete a tax return each year. To find out more about self-assessment, please go to HMRC website or click this link – https://www.gov.uk/self-assessment-tax-returns.
There is tax relief on fostering allowance available to foster parents and foster carers. Not only is there a £18,140 tax exemption on fostering allowance but there is also a weekly tax relief available of up to £450 per week for every week that you are caring for a foster child in your home and, in turn, claiming the fostering allowance or fostering fee.
For example, if you are fostering a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. You don’t have to pay tax on the first £45,290 you earn:
Tax exemption = £18,140 + Child 1 (52 x £450) = £23,400 + Child 2 (10 x £375) = £3,750 Total = £45,290
For more details, please visit this link – https://www.gov.uk/foster-carers/help-with-the-cost-of-fostering
The tax relief on fostering allowance is because the government wants to make sure that foster parents are treated fairly by the tax system and takes into account the expenses that you have to cover as a foster parent.
It is important that you keep records of the weeks when you are caring for children and when you have no foster children at your home so that you are able to claim these reliefs when it comes to tax and self-assessment. Being sure to record all fostering allowance payments, fostering fee’s received and tracking your expenses. This will make completing your tax return much easier at the end of the financial year.
Fostering Benefit
Fostering fees and allowances are not counted as income in respect of most means-tested benefits.If you are eligible for working age benefits, they will not be affected by your fostering allowance. The benefits include the following:
- Income Support
- Job Seekers Allowance
- Council Tax Reduction
- Disability Living Allowance
- Working Tax Credits
- Housing Benefit
Although fostering allowance is not counted as income for benefits, you should make sure that you declare this income when you apply for any benefit.
Council tax reduction
Alongside the fostering allowance you may be able to have your council tax bill lowered by up to 100%. This, of course, depends on your circumstances and how many people live in your household. Each local council sets its own rules and eligibility criteria for the council tax reduction scheme and you would need to speak to your local council in order to find out if you qualify for this.
Housing Benefit Help
Contact your local council to find out about claiming housing benefit for children that you are caring for in your home. This can help to contribute towards your rent (not available if you own a property either living in or renting it out). You can also claim for a period of up to 52 weeks for a bedroom that is reserved for a foster child but is currently unoccupied.
There are many solutions that can help you make the most of life as a foster parent and the financial incentives available make the process a bit easier. Not having to worry about where money is coming from means that you can get on with what you do best, which is caring for the children that you have fostered. Money isn’t the only thing that a foster parent needs but fostering allowance, which has the reward element to it, helps you to ensure that the home environment is as comfortable as it can be for you as well as for the children. All of the above is there to help and assist you in creating a stable and secure environment. Be sure to take advantage of all the help offered.
Choosing An IFA
What to look for in an IFA/how to select an agency? To select an agency with whom you would like to be a foster carer, look out for,
When a child is placed in care, the LA is their corporate parent. Historically, Local Authorities have been responsible for providing fostering services through foster carers they have recruited.
Independent Fostering Agencies (IFA) came into existence to support Local Authorities services and provide greater choice for the child being placed.
In 2002, Fostering Guidelines and Regulations were introduced for IFAs to adhere to and the private sector provision has now increased to 30% of all foster care placements. The Local Authority provision remains far higher than IFAs but the Government is committed to expanding choice and supporting private sector growth.
The market for IFAs includes a few larger national players, several regional operators and small businesses. The majority of IFA’s are companies.
When selecting an IFA to foster with, it is important that potential carers consider many areas but in particular the support they receive, allowances payable and whether they will receive placement of a child.
What to look for in an IFA/how to select an agency? To select an agency with whom you would like to be a foster carer, look out for,
