2. Help with the cost of fostering

Foster carers get an allowance to cover the cost of caring for a child. The rate changes every April.

2013 to 2014 - minimum allowance rates

Weekly rates Babies Pre-primary Primary 11 to 15 16 to 17
London £135 £138 £148 £174 £205
South East £129 £133 £142 £167 £197
Rest of the UK £116 £119 £126 £151 £175

2014 to 2015 - minimum allowance rates

Weekly rates Babies Pre-primary Primary 11 to 15 16 to 17
London £137 £140 £157 £178 £209
South East £131 £135 £151 £171 £201
Rest of the UK £119 £122 £134 £154 £179

You could get more if:

  • the child has specific needs
  • you have certain skills
  • you make a particularly large commitment to fostering

Tax-free earnings

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

Example

Laura is a foster carer for a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. She doesn’t have to pay tax on the first £25,000 she earns:

Tax exemption = £10,000
+
Child 1 (52 x £250) = £13,000
+
Child 2 (10 x £200) = £2,000

Total = £25,000

Pensions

If you foster, you’ll be eligible for National Insurance credits, which counts towards your State Pension.

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