Money Matters and Insurance
Scope of this chapter
Please see local information on fees and allowances in Local Resources.
When you are fostering, you will need to be registered as self-employed and file tax returns. See File Your Self Assessment Tax Return Online.
You will be entitled to qualifying care relief which means that you will be entitled to:
In a tax year, households do not pay tax on a fixed amount of the money they earn from fostering. You will still pay tax on money you earn from a job or investment.
On top of this exemption, you also get tax relief for every week (or part week) that a child is in your care.
All payments made to you will be itemised. You should keep this information as a record for income tax purposes.
For further information and current figures please see: Foster Carers Relief Information (HMRC) and Help and Support for Foster Parents in England.
See relevant information on the GOV.UK website.
If you foster you may be eligible for National Insurance Credits which count towards your State Pension.
You should keep a record of how the allowance is being spent on a child/young person. You should keep receipts where possible. The child/young person should sign for money if possible that they are given e.g. pocket money and clothing allowance. This helps build a record of what has been spent, which you can show if asked about it at a later date.
You must inform your Home, Building and Contents and Car insurance company once you have been approved as a foster carer.
Tell them about the numbers of children and age ranges you expect to take. You should ask the insurance companies for written confirmation that they have included foster children on your policies. A copy of these letters should be given to your Supervising Social Worker.
Last Updated: March 13, 2024
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