Money is never the primary motivation for fostering, yet stable finances enable you to focus on what matters—meeting a child’s needs. Positive Aspirations tries to keep the system transparent: one weekly payment, a clear split between what belongs to you and what must be spent on the child, and practical guidance on tax, National Insurance and state benefits. Below you will find the detail in prose form; key numbers are still shown in a small table for quick reference.
Weekly fee and allowance—what the figures really mean
Every Monday we process carers payments: by the following Tuesday (or Wednesday, depending on your bank) the agency pays one week in arrears into your account. For children aged 0–10 the total is £462; for 11–17-year-olds it is £490. Those totals are deliberately broken into two pots.
- Carer’s allowance—£387 and £400 respectively—recognises your skill and covers household running costs (rent or mortgage, utilities, food, family car fuel, your own leisure, those extra flushing-the-loo-more-often costs). Think of it as your salary plus domestic overheads. It is yours to budget as you see fit.
- Accountable allowance—£75 for under-11s, £90 for over-11s—belongs to the child. It is ring-fenced for pocket-money, clothing, savings, birthday presents, school trips, cinema outings and so on. The figures published in the policy are guides, not iron rules, but the total must add up each week: £75 or £90. Supervising Social Workers (SSWs) will sometimes ask to see receipts or a simple spreadsheet so we can evidence to Local Authorities—and to children themselves—that funds meant for them really did reach them.
Weekly logs should therefore include a two-line note:
“A-allowance spent this week – £20 clothes, £10 savings, £12 football subs, £7 pocket-money, £15 half-term outing, £11 toiletries / snacks = £75.”
No need to upload every bus ticket; a clear running record suffices.
Periods with no placement and the question of retainers
Because we are paid by Local Authorities only for the nights a child actually sleeps in your home, payments stop the day after a child leaves. This is why we recommend keeping an emergency “gap fund” worth at least eight weeks’ household bills. In rare cases a placing authority will authorise a retainer when a child has been formally matched but there is a delay in moving; that decision is theirs, not ours, and must be agreed before the child’s original move date passes.
Similarly, when you offer respite to another Positive Aspirations carer, you receive the week’s fee and allowance and the main carer is not paid for those days—because the respite element was folded into their weekly fee some years ago. Carers should therefore skim a little from each week to cover future respite just as self-employed people set aside money for holidays.
What happens during an allegation
If an allegation means you cannot accept children, payments pause; if a child must move as a precaution, payments stop the next day. That can feel harsh, but the regulator regards it as public money and insists on this rule. Building a contingency fund is therefore part of responsible foster-carer budgeting.
New council-tax contribution—recognising loyalty
From 1 March 2024 we introduced a sliding-scale contribution toward your council-tax bill, paid monthly on the last working day of any month in which you foster, even for one night. Amounts start at £27.50 a month in years 0-4 of service and rise to £125 a month after 20 years. If you provide only Staying-Put support the payment does not apply, because Staying-Put is funded differently, but every other placement counts. Think of it as a loyalty dividend that grows with your experience.
Tax and National Insurance—two myths and the reality
Myth 1: “Fostering income is tax-free.”
Reality: HMRC treats you as self-employed. However, “Qualifying Care Relief” is so generous—an annual fixed sum plus a weekly child rate—that many carers have no taxable profit. You still need to register, keep a placement diary, and file a return.
Myth 2: “Tax returns are terrifying.”
Reality: HMRC’s online system is step-by-step; their foster-carer e-learning video shows precisely how to calculate your qualifying amount with the simplified method. If your fostering income ends up below that threshold you tick a box, owe nothing, and move on. If you do owe tax, personal allowance and any other reliefs still apply. We run an agency-specific on-line course that mirrors the HMRC guidance and your SSW can give you the link.
Register online the week you are approved, note every child’s Monday-to-Sunday weeks, store mileage totals and keep HMRC reminders in your calendar: 31 October for paper returns, 31 January for on-line.
Benefits and fostering—key pointers in plain English
Universal Credit (UC) is replacing legacy benefits. The good news is that fostering income is ignored when UC decides your award. The tougher news is conditionality: where there are two carers, the second adult may have to job-search unless you can evidence why both adults are needed at home. Letters from SSWs and social workers describing the child’s needs usually satisfy work coaches, but you must negotiate each case.
Other points to remember:
- Child Benefit and Child Tax Credit cannot be claimed for foster children—only for birth, adopted or SG-Order children.
- Housing Benefit rules allow one spare bedroom for fostering; if you routinely keep two empty beds you may need a Discretionary Housing Payment to bridge the “bedroom-tax” deduction.
- Carer’s Allowance can run alongside fostering if you personally provide 35 hours’ care to someone on PIP/DLA—often a disabled birth child.
- The Turn2us benefits calculator is a fast way to check entitlements before you commit time to forms.
Good financial habits that protect you
- Transfer the savings element into a named child account every Monday.
- Photograph major receipts and file them in a cloud folder—paper fades, phones get lost.
- Label bank transfers clearly (“A-allow Brandon wk 23”); clarity expedites any audit.
- Re-quote HMRC mileage rates and personal-allowance thresholds each April; rates change.
- Keep your own “wage” separate: pay it into a second account so you can see instantly what belongs to the household and what belongs to the child.
Bottom line: Solid record-keeping and early budgeting for gaps mean money worries don’t distract you from parenting. If figures or rules still seem opaque, email finance@positiveaspirations.org or speak to your SSW—no question is trivial when it comes to safeguarding your household’s financial wellbeing.
