Money Matters a guide to fostering finances
Money Matters a guide to fostering finances
“Money does matter, it matters to everyone, it goes without saying that being paid in life is important. Foster carers should never be afraid to talk about money, they have bills to pay just like everyone else and for the vast majority of carers fostering is a full-time job.
Of course, you are not coming into fostering “just for the money” but in today’s social and economic landscape very few people can afford to do altruistic voluntary work, besides which foster carers should be recognised and valued and their skills, qualifications and experience should be appropriately remunerated as they are in any other profession”
Sarah Anderson, Founder FosterWiki
1. Introduction to Money Matters a guide to fostering finances
Foster carers receive payments in allowances and fees.
Foster care is devolved to each fostering provider, both local authority and independent fostering agency, it is, therefore, their decision as to the levels of pay and what form those pay structures take.
This is a basic introduction to how ‘the money works’ for foster carers.
2. Pay, Allowances and fees
All foster carers receive a weekly fostering allowance, this is to cover the cost of caring for a fostered child. This includes food, clothes, toiletries, travel and all other expenses incurred. Fees or skills payments will often be made on top of allowances. While all foster carers receive an allowance, there is no mandatory or statutory requirement for fee/skills payments to be made.
Payments and allowances should be separate and clearly identified so that foster carers know which portion of their fostering income should be spent on caring for the child in their care, and which is for the job that they do.
However, some fostering services, usually the private agencies will make a lump sum ‘financial package’ which does not make the split clear.
Local authorities sometimes have a ‘skills levels’ system varying from level 1 for the basic entry-level carer to level 3 or 4 for the more experienced, skilled and qualified carers who take on children or young people with additional needs or extreme behavioural issues.
The children’s ‘allowances’ are set at the local level and vary widely across the UK according to the age and needs of a child, but in England, Wales and Northern Ireland foster carers should receive at least the national minimum rates (see links below).
Scotland does not currently have national minimum allowances for foster carers, although the Scottish Government has committed to making recommendations in the near future.
What allowances should cover
Allowances are designed to cover direct expenditure on the child and additional household costs (such as furniture and furnishings, utilities and insurance).
National Minimum Allowances can be found here:
Scotland: Scotland does not currently have national minimum allowances for foster carers, although the Scottish Government has committed to making recommendations in the near future.
Read more about it here: https://www.thefosteringnetwork.org.uk/mfcf
3. How does it work
As a foster carer, you are classified as ‘Self-Employed’.
You should register with HMRC as self-employed and will fill in a tax return each year.
Fostering has different and generous tax allowances. You can find out about self-employed tax returns, allowances, accountants and more in FosterWiki’s ‘The business side of self-employment’ and “Your role as a professional” in the members’ area. https://fosterwiki.com/members/
In terms of when you are paid, it can vary, most providers pay weekly in arrears and some fortnightly. They send you an end of year statement that you can use for your tax returns and your accountant if you have one.
4. Tax & National Insurance
Fostering carers pay tax, however, there are generous tax allowances. Carers also pay their own National Insurance.
This information is available in the FosterWiki members area and in these government guidances;
5. Mileage and expenses
The majority of fostering provides pay carers 45per mile. However, when the provider will pay mileage can vary. Some will cover all the foster carer’s miles that are accrued in their role of caring for a child, some agencies will only pay over and
above a certain number of miles a day.
The method for claiming expenses also varies, so make sure your supervising social worker has given you the form, whether that is a physical or electronic one. It is good practice for providers to pay expenses in a timely manner.
6. Children’s holiday/birthday and festive payments
Foster carers generally receive extra payments to cover children’s birthdays, holidays and festivities such as Christmas.
Foster carers also generally receive two weeks extra child’s allowance a year to cover the children’s holidays, and one week’s allowance for their birthday and one for Christmas.
Some fostering providers will build these amounts into the foster carers weekly payments.
7. Foster carer’s holiday/short breaks/respite payments
Again due to the foster carer being devolved to each fostering provider you will find the question of holiday/short breaks/respite payments also varies.
Most good fostering providers will have a foster carers holiday/respite allocation written into their policies and some into their fostering agreements.
It is rarely more than 2 weeks per year, and payments can vary between full fostering allowances and fees for time off, some providers will only pay the fees and give the fostering allowance to the respite carers.
Please see the FosterWiki page on 30hrs free childcare here: https://fosterwiki.com/wiki/30-hours-free-childcare/
9. Damage and accidents
- The local authority is the corporate parent and they will share parental responsibility to different degrees with the birth parent. Foster carers never have parental responsibility.
- Ultimately they are responsible for the actions of the child in your care. They will always ask you to claim on your household insurance for damage accidental or intentional as it is cheaper for them.
- However, it is not as simple as it seems as;
- Household insurance rarely covers intentional damage and may not cover accidental if they realise it’s a looked after child in the care of the local authority.
- Some insurance companies (2 that we can find) specialise in fostering household insurance, however, our feedback from carers and research suggests that;
- These specialist companies are very expensive.
- If they do cover for intentional damage by a looked after the child at least one of them requires a police report number, and a foster carer would be very reluctant to report damage as a police matter unless extremely serious.
- Even if your insurance did cover it you would still have to pay the excess.
10. Pensions, sick pay and retainers.
Foster carers have no pension provision, other than state pension.
Foster carers are not entitled to sick pay. Some fostering providers pay retainers to carers in between placements, however, this is very rare. On the whole, if you have no placement you will have no income.
11. Benefits – Income support, universal credit and tax credits
This FosterWiki page is currently in development.
12. What foster carers say
“We can’t even get grants anymore either. They’ve been phasing them out for years. Clear pays my preferred for instalment payments but we shouldn’t have to use them.”
13. Information, Help and Support
Help and support created for foster carers, by foster carers, we are the experts by experience. We have the first foster carers knowledge bank.
Access both the open pages and members area. Both are free to access and footprint-free. The member’s area gives you privileged confidential access to FosterWiki’s experts by experience for advice and guidance. You will also find short courses and guides from the foster carer’s perspective, top tips, allegation help, templates, and the ability to add to FosterWiki. With more content being uploaded regularly.
Please let us know what information or advice pages you would find useful and we will put them in place. https://fosterwiki.com/register/
- England: https://www.gov.uk/support-for-foster-parents/help-with-the-cost-of-fostering
- Wales: https://www.flintshirefostering.org.uk/en/PDFs/National-Minimum-Allowances-for-Foster-Carers-2020-2023-English-letter.pdf
- Scotland: Scotland does not currently have national minimum allowances for foster carers, although the Scottish Government has committed to making recommendations in the near future. Read more about it here: https://www.thefosteringnetwork.org.uk/mfcf