Fostering Allowance

How much do Foster Carers get paid with Swiis?

The exact amount of fostering allowance offered to Foster carers varies depending on the type of placement, age of the child and the child’s individual needs. Whatever the circumstances, the pay our foster carers receive is amongst the highest in the industry. Generally, the older the child or young person the higher the weekly fee.

The Scottish Government sets out that all foster parents get a minimum foster care allowance to help cover the cost of caring for a child. Swiis remunerate our foster carers significantly above the national minimum allowances, as shown below:

*These allowances are indicative and may vary depending upon the age and needs of the placement.

For more information on the recently introduced national minimum fostering allowance in Scotland, please click here https://www.gov.scot/news/new-national-allowance-for-foster-and-kinship-carers/

These figures are effective from the 1st April 2023.

Standard fostering allowance examples:

Child/young Person – standard needs

A foster carer who has one child aged 13, will receive an average pay of £540 a week, which with HMRC tax relief applied to fostering will equate to an annual net income (take home pay) of over £28,000.00 per annum.

Due to HMRC Tax Relief for Fostering, all of this income would be TAX FREE. Comparing this to an employed person on PAYE the take home fee equals that of an annual salary of over £33,850.00 per annum.

Two unrelated children or young people – standard needs

A foster carer that has two unrelated children aged 11 and 14, in placement, will receive an average pay of £520 a week per child and would subsequently equate to a potential income of approximately £56,000.00 per year.

Due to HMRC Tax Relief for Fostering, all of this income would be TAX-FREE. Comparing this to an employed person on PAYE your take home pay equals that of an annual salary of over £80,000.00 per annum.

Additional needs fostering

An enhanced weekly fee of up to £710 per week will be paid to carers caring for children and young people who display complex challenging behaviours. In such instances, we will only ever place 1 child at a time (known as a solo placement) to ensure the highest level of support is provided to the foster carer and young person. For this type of placement, the foster carer will have no other children living in the home.

As an example, a foster carer who has one Enhanced Fostering placement (solo) child aged 13, will receive an average pay of £710.00 a week, which with HMRC tax relief, equals a potential income of approximately £40,000.00 per year.

Due to HMRC Tax Relief for Fostering, all of this income would be TAX FREE. Comparing this to an employed person on PAYE the take home fee equals that of an annual salary over of over £56,000.00 per annum.

How the Allowance Works

As a Swiis foster carer, you will receive a combined allowance each week. This is split into two parts, one which covers the costs of caring for the children or young people and should be utilised for all their food, clothes, activities and other sundries, the other is a fee paid to the carers for the support they provide for the carer role. The fostering allowance should be allocated towards supporting the child or young person in placement, however, guidance in terms of how the allowance should be utilised is provided to you in writing at the commencement of the placement. The weekly allocation of the allowance is discretionary.

Employed or Self-Employed?

Foster carers are classed as self-employed and receive considerable tax relief on any income earned as a carer. Swiis further provides a number of other ad hoc payments to our carers to help towards the exceptional costs of looking after children. This may include support towards clothing, equipment and activities. All additional payments are made on a case by case basis and will be in addition to your weekly fee. All new carers taking their first placement will receive a start-up payment of £200 to help with the initial costs of fostering, such as equipment or essential sundries. Many other fostering organisations do not provide such enhanced benefits to its carers.

How Does Fostering Pay Affect Tax, Pensions and State Benefits?

Fostering allowances and fees received for fostering are fully disregarded for the purposes of calculating entitlement to means tested benefits and where a (Secondary) foster carer may be searching for work, they will be able to continue to receive jobseeker’s allowance, income support and employment and support allowance.

Tax Exemption for Foster Carer Pay

There is a fixed tax exemption of up to £18,140 per year (called Qualifying Care Relief) which is shared equally among any foster carers in the same household. This means you don’t have to pay tax on the first £18,140 of the income you make from fostering per year.

In addition to the £18,140 tax exemption, foster carers will receive additional tax relief for every week (or part week) that a child or young person is in your care of £375 (per week) for each child under 11, or £450 per week for each child or young person aged 11 or older. Collectively both the Qualifying Care Relief and additional weekly fostering tax benefits applied to the fostering role, will for most foster carers, negate the requirement to pay tax on earnings from fostering.

How Fostering Pay Affects Your Pension and National Insurance

If you foster, you will be eligible for national Insurance credits, which counts towards your State Pension.

The HMRC have also created a dedicated Foster Care eLearning package which offers Foster Carers guidance, advice and practical tips relating to tax and National Insurance.

Fostering pay and allowances will not affect your entitlement to most state benefit payments.

Fostering pay and allowances will not affect any housing benefit payments.  If you claim carer’s allowance or disability living allowance (DLA) for your own child, these will also not be impacted. You can learn more about these benefits on the UK government website.

As fostering counts as self-employment, you could also be entitled to working tax credit and child tax credit if you have children of your own.

The only exception is jobseeker’s allowance (JSA), which will be affected if you are receiving a fostering allowance.

Claiming DLA for a foster child or young person

If you have a foster child with a disability, the child’s Supervising Social Worker will assist you to make a claim for DLA on their behalf to your Local Authority. The Local Authority will work with you and Swiis Foster Care to agree a care plan and the budget requirements for the DLA award. They may additionally also pay for any modifications you need for your home. Find out more about disability benefits at GOV.UK.

What Additional Pay Does Swiis Give Its Foster Carers?

Swiis’s Welcome Support Payment

In addition to the weekly allowance, you will receive a Welcome Support package of £1,000 which is provided to all new foster carers to assist them with the preparation of their first placement.

Transferring foster carers should contact the Swiis office directly for more information about the welcome payment for transferring foster carers.

When children or young people arrive in placement without the necessary clothing and equipment, Swiis will provide additional payments for essential items as necessary.

All additional payments will be determined on a case-by-case basis.

Support

Additional payments may also be made to foster carers for ‘out of the ordinary’ expenditures e.g. specialist sports equipment to enable a young person with sporting talent to compete. Swiis believe that where possible, all children and young people should have the opportunity to be part of a family holiday and experience opportunities that they would not have otherwise had.