Foster carers receive a weekly fostering allowance, which is usually paid fortnightly. This is intended to cover the costs of caring for a child in foster care, such as clothing, food and pocket money, and the amount varies depending on the age of the child. 

Some fostering services also pay their foster carers a fee on top of the fostering allowance, in recognition of their time, skills and experience. Foster care pay may be set in a way that financially rewards foster carers who complete additional training or look after children with more complex needs. Some services combine weekly allowances and fees into a single payment. 

Foster carers are self-employed and their income as foster carers is subject to tax. However, there is a simplified income tax scheme for foster carers, called Qualifying Care Relief (QCR). The earnings threshold for this scheme increased from £10,000 to £18,140 from April 2023 (the first increase in 10 years). As a result, the vast majority of foster carers will pay no tax on their fostering income. Similarly, fostering should not affect your benefits, in the majority of cases. 

Foster care payments vary between fostering services. They also depend on a carer’s experience and how many children you are caring for. For example, as a newly-qualified foster carer in Greater Manchester you could be paid an average of £300 a week to foster one child. This works out at just under £16,000 a year and would be equivalent to a salary of £19,500 a year if you had to pay tax. If you foster two children you could be paid £800 a week, or £42,000 a year, the equivalent of a £63,000 salary if you had to pay tax. 

You will also receive money for school uniforms, birthdays, Christmas or religious festivals and some mileage. You are also entitled to funding for any special support a child needs. Some local councils offer rebates on council tax and foster carers may be entitled to discounts on leisure activities like swimming. 

Other considerations need to be taken into account. Because you will be self-employed, you will not normally be entitled to sick leave or paid holidays. You must make your own pension arrangements and register to pay Class 2 National Insurance Contributions. It is important to bear in mind is that you only receive a fostering allowance when a child is living in your home. You will get reimbursements for expenses such as petrol and school uniforms, but please note that they aren’t paid instantly, so can take a little bit of time to process.

Whatever your motivation for becoming a foster carer, it is important to consider the financial impact on your family. For example, how will it affect your household income if you have to give up your other work or reduce your working hours? Many foster carers continue to work but this is not always possible or practical. Will you be able to afford a bigger car from your fostering allowance, if you need one? If you foster siblings, or there are already children living at your home, you’ll have to consider the practicalities of getting them out and about.

The Fostering Network charity reports that many foster carers spend more on children in their care than they receive in fees and allowances. So, take time to look beyond the headline numbers to work out how your household finances will change.