What financial help do you get when fostering?
8th Apr 2016
According to Barnardo’s, the number of children in care in the UK has now reached 70,000 – the highest level for 30 years. With such a large amount of children needing care, if you’ve been considering becoming a foster carer, now could be the time to take that step.
If you’ve always thought about fostering but worried it would be too much of a strain on your finances, then you shouldn’t worry. There is financial help available for foster carers and we’re going to take you through what this is.
As a foster carer you will get an allowance to cover the cost of caring for a child. You’ll receive this weekly and these rates will change every April. The following are the rates for the tax year 2016-2017.
Rest of UK
This allowance can increase depending on whether the child has any specific needs, you have certain skills or make a large commitment to fostering.
Tax free earnings
There’s a fixed tax exemption of up to £10,000 per year on what you make from fostering. So if you make £15,000 income from fostering (after expenses) you won’t have to pay tax on the first £10,000. If you foster for a shorter period, the amount you’ll be able to earn without paying tax will be lower.
As well as this, you’ll get tax relief for every week or part week that a child is in your care. What this means is that you won’t have to pay tax on some of your earnings over £10,000. If the child is under the age of 11, you’ll receive £200 in tax relief and £250 if they’re over this age.
National Insurance credits
As a foster carer you can apply for National Insurance credits – this will fill in the gaps in your National Insurance record so that you can continue to receive certain benefits. You can apply for Class 3 credits (which counts towards your State Pension and bereavement benefits) if you’re a foster carer or kinship carer in Scotland, meaning you’re caring for a younger member of your family.
For more information on National Insurance credits, read our blog.
It’s also important to be aware of how your benefits could be affected once you become a paid foster carer. If you currently claim Jobseeker’s Allowance, Income Support or Employment and Support Allowance, then the rules around these could change.
When claiming Jobseeker’s Allowance, you will only have to work as many hours a week as your caring responsibilities allow, but this must be at least 16 hours. If you currently claim Income Support and Employment and Support Allowance, you’ll have to attend work-focused interviews regularly, although this will depend on your circumstances.
For more information on this, head to the gov.uk website.
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