Being self-employed as a foster carer

Foster carers are part of a professional team around the child they have in placement. This means foster carers will be required to attend meetings for their foster child and be readily available for social work visits. Therefore many carers, foster children as an alternative to employment as you must be available and responsible for the practical and emotional needs of your foster children 24 hours a day, while they are in your care.

All foster carers in the UK are registered as self-employed with HMRC. You may be able to qualify for unique and generous tax benefits.

Generous tax benefits for foster carers

Foster carers can claim a tax benefit called Qualifying Care Relief, which is a tax scheme for foster families. This scheme includes a generous tax threshold of £10,000 per household. Carers can also claim £200 per week for children up to the age of ten, and £250 per week for an 11 to 18-year-old. So, for example, a household giving year-round foster care to a 13-year-old child would qualify for £10,000 Qualifying Care Relief and 52 weekly allowances of £250. This would equate to £23,000 in earnings before they were liable for tax and National Insurance contributions.

Foster care placement payments

Foster carers are paid an allowance from their fostering agency. This is split into 2 parts. The first element provides an allowance to care for the child. This includes their pocket money, clothes allowance etc and the second element provides a ‘reward’ for the carers. Diagrama pays foster carers an additional allowance towards the child’s birthday, Christmas (or other religious festivals) and a holiday allowance.

Depending on the circumstances and needs of your household, you may be able to claim additional state benefits too.

Find out more about becoming a foster carer

If you live in Kent, Medway, London, Surrey or East Sussex and are interested in becoming a foster parent, you can find out more about self-employment, the financial impact on your household or any other aspect of foster care, by contacting Diagrama Fostering today.

Alternatively you can download our booklet which contains everything you need to know about making a difference to a child’s life through fostering.