What Benefits Can I Claim if I’m a Foster Carer?

For many, the first concern about becoming a foster carer is how you’ll afford to feed, clothe and care for the extra child or children in your house. With only so many hours in the day, it can become a struggle to work in full-time employment. So, how can you ensure that you have enough money coming in to make everyone comfortable, safe and happy?

Fortunately, there is plenty of financial support available to foster parents. Regardless of whether you’re working with the local council, a voluntary organisation or an independent agency like Olive Branch Fostering, there are a range of credits, allowances and benefits available, ensuring that you won’t be left to struggle.

If you’re pondering; ‘what benefits can I claim if I’m a foster carer’, read on as we explore what support is available to you.

Fostering allowance

When fostering, you’ll receive a weekly allowance to cover things such as food, transport and other expenses.

This fee can range depending on which agency or council you chose to foster through, your location in the UK and the age of the child you’re caring for. As a very minimum, you’ll receive £132 per week. However, this will increase as the child gets older.

At Olive Branch Fostering, we understand that fostering is a full-time commitment. As such, we ensure our fee is enough to cover care for the child, as well as reward the carer. Depending on the age and needs of each child, our weekly fee is up to £405 per child.

Tax relief and exemptions

As a foster carer, you’ll benefit from a fixed tax exemption of up to £10,000 per year. This is shared equally between other foster parents in your household. The tax exemption means that you will not pay any tax on the first £10,000 you make while fostering.

On top of this, you’ll also get tax relief for every week that you care for a child. For a child under the age of 11, this will be £200 per week. For a child over 11, it will increase to £250 per week.

Means-tested benefits

Alongside your allowances and tax benefits, you could also be eligible for means-tested benefits. These are the benefits available to those who can demonstrate that their income or overall capital is below a certain level.

A majority of these benefits and credits were ones that foster carers were eligible for. However, many of these have now been rolled into Universal Credit.

Universal Credit

Universal Credit has been bought in to replace a number of benefit schemes, including Working Tax Credits, Job Seekers Allowance and Income Support. If you are already receiving support through these schemes, you don’t need to do anything as you’ll automatically be switched to the new credit system.

However, if you’re a new foster carer, or looking to return to fostering, these changes may be confusing to navigate. So, to clarify the benefits system, and the types of things you can claim for via Universal Credit, we’ll explore the different types of credits that are now included under the umbrella of UC.

Income Support

Income support was for those who are on a low income and was only available for those who do not fall into the category of needing to look for work. This was only applicable for those working less than 16 hours a week. This doesn’t include foster work as your allowance is not seen as income by the Department for Work and Pensions.

Now, the equivalent can be claimed via Universal Credit. Or, if you’re eligible for serve disability premium, you’ll be able to claim this in the weeks that you have a child staying with you.

Working Tax Credit

Working Tax Credits (WTC) was designed to top up the earnings of low paid workers. As such, it’s based on the hours of work you complete. Because foster carers are required to register as self-employed, HMRC regards fostering as work, meaning that foster carers can claim WTC.

However, only those eligible for the severe disability premium can now apply for WTC as it is now included in UC.

Job Seekers Allowance

There are three types of Job Seekers Allowance. These include ‘New Style’, contribution-based, and income-based JSA. Both of the latter have now moved into Universal Credit for those not claiming severe disability premium, meaning foster parents will only be able to apply for UC to get the equivalent to the old JSA.

Unfortunately, ‘New Style’ JSA is not applicable for foster parents either as those who are self-employed are not eligible.

Claiming Universal Credit

You will be eligible for Universal Credit if you’re on a low income, over 18 and have under £16,000 in savings. The amount you may get will vary, depending on factors such as your age and whether you live with a partner. You’ll also get extra credit if you have children. However, this won’t count for foster children as you’ll already be receiving an allowance for them.

There are simple benefits calculators that can help you decipher what you are, and are not, eligible for under UC. You’ll need to be able to provide information about your savings, council tax, income, including your partner’s, and your outgoings before submitting your application.

How will fostering affect my other benefits?

For those already receiving benefits, you may also be concerned about how becoming a foster carer may affect what you currently receive.

Child Benefit

If you currently received child benefit for your own children, this will not be impacted, and you will continue to be able to claim this. However, you will not be able to claim this for any foster children in your care.

Disability Living Allowance and Carers Allowance

If you already claim Disability Living Allowance, you’ll able to continue to access this allowance. In addition, if you take in a child under the age of 16 who is entitled, you will also be able to claim for this. As a result, you’ll also be able to claim a Carers Allowance for each child entitled for DLA.

Start your fostering journey today

If you’re interested in becoming a foster carer or simply want to know more, get in touch with our friendly team for a chat.

We’ll be able to talk through all finance aspects with you, as well as answer any other questions or queries you may have. Call us on 01706 558910 today.