Money Matters and Insurance

Once you have completed the preparation training and the fostering induction standards and have a child placed with you, you will receive at least the minimum fostering allowances listed in the tables below. Allowances are usually made up of two components. The basic age related child allowance and the competence payment relating specifically to the foster carers tier level within the progression scheme.

If you have any queries about allowances or if you think you have been under or over paid, contact the finance section in the Fostering Service as soon as possible.

Payments to you are made in arrears, direct to their bank or building society.

Click here for the national minimum fostering allowances.

The national minimum allowances are only the base minimum rates. The actual allowance that you will receive will depend on a number of factors, in particular the specific needs of the child. You may also get paid in recognition of your skills, commitment or time. Fostering agencies may make one payment to cover both of these.

While a child is Looked After, they are entitled to a number of other allowances.

The level of these payments is reviewed once a year.

Please see Local Resources to access full details on Tameside’s Pocket Money & Savings for children in foster care.

Foster carers have an important role in educating children and young people in the responsible use of money. This is particularly important for older children and young people preparing for independence.

Disagreements can easily arise concerning the amounts of money to be given to children and young people and the way that this money is to be spent. It is therefore important to discuss this fully in the Placement Planning Meeting and to review regularly what has been agreed.

Ideally young people should be provided with a weekly allowance (dependent upon age) to spend at their discretion or if appropriate to spend with the support of their foster carer. Pocket money would generally be used to buy non-essential items, or some of this may be saved e.g. for more expensive ‘designer’ items of clothing or for holiday ‘spends’.

Pocket money should be paid at a suggested rate of 5% of the boarding out and expenses for under 11s (approx. £8) and 12% for over 11s (up to approx. £23 dependant on age). This is in recognition of the fact that teenagers will begin to want additional social expenditure and some non-essential personal items of choice.

The recommended rate for pocket money is based on the understanding that all carers will fund at least one extra curricula activity from their boarding out and expenses. The carer and young person via negotiation and dependent upon cost should fund any additional hobbies or interests jointly.

It is acknowledged that carers may allocate pocket money to the child in different ways. Some may provide a lump sum; others may spend it on behalf of children, in particular those younger in age. The allocation of pocket money will no doubt be varied to suit the needs of the child. Older children and young people usually prefer a specific cash allocation.

As young people move towards independence, discussion should take place about them being allocated more of the fostering allowance to take responsibility for the purchase of other items such as clothing, toiletries, etc as this is an important part of learning budgeting skills. Discussions and agreements about this should take place during Pathway Plan meetings or earlier where appropriate.

Savings

All young people should be encouraged to save and will have a savings allowance of £5 per week which should be paid into a suitable bank account in the child’s name. This is the child’s money and ensures that they do not leave care with no savings. This money will go with the child when they move on.

If a child moves placement, it will be the responsibility of the foster carer in liaison with the social worker to ensure the address on the bank account is changed to that of the new foster carer. If the child is to return home, the foster carer should liaise with the social worker and agree how the money is transferred.

Dinner Money

A child’s school dinner money or the cost of packed lunch should be paid from the foster care allowance.

Children and young people placed with foster carers are not eligible for free school meals. If a child is receiving free schools meals when placed with you; you should inform the school that the child is no longer eligible.

Insurance

Foster carers should ensure that they have sufficient household and car insurance and that their policies recognise their status as foster carers. This means foster carers should inform insurance companies that they are approved foster carers, omitting to do this could render your insurance policies invalid. 

The cost of getting birth certificates (and copies), passports and Life Story books will be met by the Fostering Service.

Information is also available from the GOV.UK website about passports.

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:

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.