fostering allowance

Fostering allowance

We want to build a community of professional and highly-skilled foster parents who are financially rewarded so that every child in care has the best chance of achieving their full potential.

As an Orange Grove foster parent, you'll be rewarded with a generous fostering allowance for every night a child spends in your care, plus other allowances and benefits too.

The foster care pay covers the cost of caring for a child or young person while providing you with a professional fee so that you can dedicate your time to fulfilling the needs of children in care, rather than seeking additional employment - although, some may still wish to work and foster.

This makes becoming a foster parent a viable career option for anybody who wants to make a difference to a child’s life.

How much are foster parents paid?

How much you are paid as a foster parent depends on a number of factors, including:

  • The local authority or independent fostering agency you work with
  • Your experience and the length of time you've been fostering
  • The age and number of children in your care
  • The placement type - for example, you may receive a higher payment for specialist fostering such as parent and child fostering
  • Where you live - for example, we offer higher payments to those living within London to cover the higher cost of living

At Orange Grove, we have different foster care pay scales - grades 1-3 - depending on your experience, training and the age of the child in your care. Discover our fostering payments below.

Grade 1 - New to fostering

You'll start your fostering career with Orange Grove on our Grade 1 payment tier until you've completed 12 months of fostering and your core training.

Depending on the age of the child in your care, you'll receive between £313.13 and £400.05 per week, per child. 

Grade 2 - 1 year's experience

Once you've completed 12 months of fostering children, plus your Training and Development Standards and all core training, you'll move to our Grade 2 payment tier. 

You’ll also receive this payment grade if you’re transferring from another fostering agency or local authority with 12 months of fostering experience and have previously completed the Training and Development Standards.

Depending on the age of the child in your care, you'll receive between £323.14 and £410.06 per week, per child. 

Grade 3 - 3 years' experience

You can also apply to become a Grade 3 foster parent, however, you'll need to have at least 3 years of achieving excellent outcomes for children in your care and also play an active role in your local support groups and activities. 

Depending on the age of the child in your care, you'll receive between £333.15 and £420.07 per week, per child. 

foster carer pay

Additional fostering allowances

As well as a generous fostering allowance, we also provide additional benefits to encourage your wellbeing as a foster parent, as well as creating memorable and enriching life experiences for the young people in care, including:

  • 2 weeks of paid respite per year
  • £100 annual birthday allowance for the child in your care
  • £100 annual festival allowance for the child in your care

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Exclusive Refer-a-Friend Scheme

As a foster parent, you’ll know what it takes to make a big difference to the lives of children in care and our Refer-a-Friend scheme encourages you to recommend people in your network who would make fantastic foster parents. In return, you can receive up to £3,000 for every family you recommend who becomes approved and completes 12 months of fostering.

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Great rewards and benefits for foster parents

When you join our team, you’ll access hundreds of exciting benefits through our foster parent rewards platform, including discounts at big retailers, such as Sainsbury’s, Primark, Costa and Argos, as well travel agents, cinema chains and gyms. Plus, you’ll also have access to advise on finances, fitness, nutrition and more!

how much do foster carers get paid

Tax and foster care allowance

While your income from fostering is taxable, you’ll receive a £10,000 tax exemption, plus additional tax relief for each child in placement. This generally makes your income from fostering completely tax-free. This is known as the Qualifying Care Relief – a special tax rule set up by HMRC for foster parents.

Plus, if your taxable income is less than your Qualifying Care Relief, you won’t need to pay National Insurance contributions. However, you may still decide to pay voluntary contributions so you’re eligible to claim state benefits, including the state pension.

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How does foster care pay work?

The fostering allowance is designed to:

  1. Cover the cost of caring for a child
  2. Financially reward you for the around-the-clock care you provide to a child

As an Orange Grove foster parent, you'll receive the payment for each night a child spends in your care directly into your bank account each month. However, other independent fostering agencies and local authorities may work differently. The amount of allowance you receive will depend on things like where you live, your experience, and the age and number of children in your care.

You may also receive additional expenses, such as extra mileage, however, these will need to be agreed upon with the local authority ahead of the child being placed with you. 

As a foster parent, you are classed as self-employed and will have to submit a tax return every year - although there are specialist tax rules for foster parents which generally makes your fostering income tax-free

Foster allowance breakdown

What do the foster payments cover?

As well as the professional fee to the foster parent, the allowance should cover:

  • Food and drink - including school meals
  • Clothing
  • Transport 
  • Personal hygiene
  • Hobbies, interests and fun days out
  • Utilities, including phone bill

Local authority vs independent fostering agency allowances

Every independent agency and local authority will have a different allowance package for their foster parents. In general, independent fostering agencies, such as Orange Grove, are more generous with their allowance package than local authorities. This is often because local authorities place older children (aged 7 and over) with independent agencies, and the babies, toddlers and younger children (under 7's) are placed with their own foster parents. 

There are minimum national recommended rates of pay for foster parents - between £132 and £231 per week. However, we offer a far more generous payment - £313 and £420 per week - to ensure our foster parents feel valued and able to continue the uniquely challenging but incredibly life-changing work they do.

Allowances for siblings and additional children

We're passionate about keeping siblings together in foster care wherever possible, as it provides so many benefits to children and often the outcomes achieved. When caring for siblings, you'll receive the full payment for the eldest child and then a slightly reduced fee for any siblings - which is saved in things like transport costs to contact, etc. You'll receive the full payment for any children who are not related, as you'll need to facilitate contact with birth families for all the children.

Can I work while receiving the foster care allowance?

In many circumstances, it's definitely possible to work and foster - in fact, many of our foster parents do.

As part of the fostering assessment, we'll simply need to explore how your work will fit in with the demands and expectations of being a foster parent, and whether you have a strong support network who will be able to assist.

For example, if you're fostering with a partner, will they be able to assist with school drop-offs? Is your work flexible and will allow you to take time off for training and meetings? Or if you're single, do you have close friends and family who could support you in an emergency?

How much tax do you pay on your fostering allowance?

Generally, your income from fostering is completely tax-free, thanks to special tax rules granted by HMRC to foster parents. 

If you're fostering one child for a year, you could receive:

  • Personal tax relief of £10,000

You'll also receive a weekly tax allowance depending on the age of the child in your care:

  • £200 per week for children under 11
  • £250 per week for children over 11

This is known as Qualifying Care Relief.

Does fostering affect National Insurance, benefits and pensions?

If your income from fostering is below the threshold to pay tax, you also won't need to pay National Insurance, unless you want to make voluntary contributions. Find out more about national insurance and fostering here.

Qualifying Care Relief also means that the fostering allowance also shouldn't impact any state benefits you receive, including the state pension, income support, housing benefit, child benefit and more. Find out more about how fostering impacts benefits here.

 

Other frequently asked questions

Are foster parents self-employed?

Yes, foster parents are classed as self-employed, so make sure you register yourself as self-employed as soon as you start caring for your first foster child. Once registered, you’ll then be required to complete a tax return every year.

You can register yourself as self-employed in three relatively straightforward ways:
1. Register online here
2. Complete a CWF1 form available online
3. Call the newly self-employed helpline on 0300 200 3504

Will I be paid in between fostering placements?

No, foster parents are only paid an allowance when they're caring for a child. For this reason, we advice foster parents to be open to a wider age range, as only fostering young children can lead to longer gaps in between placements.

However, we receive hundreds of referrals every day from local authorities and have a dedicated Referrals Team who match these children with the skills and experience of our foster parents.

In addition, we work closely with our foster parents whose children are approaching the date that’s planned for them to move on from their care and work with local authorities to identify any potential placements that can be planned in future.

Would I still be able to claim benefits when fostering?

The fostering allowance doesn’t impact whether you’ll be able to receive means-tested benefits, as it’s not counted towards income. Therefore, benefits such as income support, child tax credit and housing benefit, should remain unaffected.

Do foster parents receive child benefits?

You will not receive the child benefit for a child in your care because you'll be paid a fostering allowance instead. Fostering will not affect the child benefit of any birth children or adoptive children in your family.

More FAQs

Got some more questions? Find out the answers here.

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