Understanding Your Fostering Finances

Understandably, many potential foster carers are worried about their ability to meet the needs of the child they care for financially. They are also worried about loss of earnings if they leave a paid position to become a foster carer. Discussing financial worries about fostering shouldn’t be taboo. This article discusses fostering allowance and other financial support you will receive.

Being a Foster Carer is a Job

There’s no doubting that foster caring is a highly unusual and distinct job, but a job it is. Furthermore, it is a skilled and professional job. Therefore, you get remunerated for it. You need financial support in order to ‘do the job’ and provide the best level of care to your foster child.

In practice, the unique nature of this job means that there are two financial demands: the care needs of the child and your ‘compensation’. The ‘fostering allowance’ technically accounts for the first financial need. This is usually rolled together with a fostering payment which is, effectively, your payment for the job you are doing.

How fostering allowance is calculated Understanding this ‘split’ in financial need helps you to understand how fostering allowance is calculated. Fostering allowance amounts have a minimum amount, per week, set by the government.

This comprises the care needs element which should cover paying for the child’s needs in terms of things such as clothing, heating, and daily living. It also has an element of the professional fee. This is likely the rate you will get if you become a foster carer through the local authority.

With fostering allowances, it’s important to understand that they vary according to a number of different factors. Most notably, the younger a child is, the lower the rate of the fostering allowance. For example, a foster carer of a baby in Scotland would receive £127 per week, whereas they will receive considerably more for a teen.

These rates are also increased if it is a more specialised role, for example if the child has additional needs (either behavioural or physical), or for some placements such as asylum seeking children.

Can I get more than the fostering allowance?

The fostering allowance rates are set by the government and represent the minimum you should receive. However, many independent agencies, such as FCA Scotland, believe it is important to offer foster carers a higher rate of fostering allowance.

Whilst these allowances will still vary according to factors such as the age and needs of the child, they are more than the government set minimum. This is to ensure our foster carers are free from financial concerns due to fostering, and are rewarded for the difficult role they do.

Understanding tax and fostering

It’s also important, when doing your sums and considering foster caring, that tax is treated a little differently. Your income from fostering receives its own tax exemption up to a maximum of £10,000 each year. This is per household. Therefore, if you are a foster caring couple, this is split between you. Over £10,000 you still don’t pay the usual rates of tax on fostering earnings.

How must your fostering allowance be spent?

By combining the financial needs of the child and your professional fee in to one payment, the system recognises that a family-setting doesn’t have a one-size-fits-all approach. You will need to provide for the child in your care in terms of clothing, entertainment, transport and food. However, how and when you spend money is fully up to you, as long as you meet these needs of the child.

Don’t be embarrassed to ask questions about fostering allowances and finances. These are important questions to ask, so please do not hesitate to contact us.

 

** This is a guest post ** 

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