Money Matters and Insurance
Scope of this chapter
LEGAL FRAMEWORK
Fostering Services National Minimum Standards 2011: Standard 28 "Payments to foster carers"
Fostering Services Regulations 2011: Regulations 17, 27, Schedule 5
Break aspires to be an organisation that rewards foster carers fairly. Our payments are above the national average, are transparent and will be paid in a timely manner to foster carers.
Payments to our foster carers will be reviewed annually to ensure that Break always pays above the national average. Any proposed changes to foster carer's payments will be consulted upon before hand with foster carers.
Your payments are made up of two elements- the reward or fee element which is paid in recognition of the foster carer's skills, knowledge and experience and the maintenance allowance which is designed to cover all the costs incurred in caring for a child.
There are three levels of fostering allowance that will be agreed with you and the Local Authority prior to placement. These levels reflect the level of need for each child as prescribed by the local authority.
Standard – Foster carers will be paid £363 per week. This is made up of a maintenance element of £121 and a reward element of £242 per week.
Intensive – Foster carers will be paid £600 per week. This is made up of a maintenance element of £200 and a reward element of £400 per week.
Step-down (for children whose immediate previous placement was in residential care) - Foster carers will be paid £848 made up of a maintenance rate of £282.67 and a reward element of £565.33.
These breakdowns will help identify taxable income you require a breakdown for tax purposes.
Payments will be made weekly in arrears. Payments for the previous week will be processed on Mondays to reach your bank account on Wednesdays. If a child is placed after the processing date then payment will not be processed until the following payment run. Please note that when you receive your payment from Break it will separated into the two reward and maintenance elements. This is to make it easier for your tax purposes.
The table below gives the proportion of the allowance likely to be needed for the 'average' child receiving the intensive rate:
| Age of Child | Clothing | Household | Personal | Transport |
|---|---|---|---|---|
| 8 – 10 | £52 | £90 | £28 | £30 |
| 11 – 18 | £52 | £90 | £28 | £30 |
These are guidelines only and will vary according to the child's individual needs. How the maintenance allowance is divided up is down to you. If in doubt please discuss this with your supervising social worker.
Clothing allowance is to cover everyday clothes, school uniform, sports kit, Scout or Guide uniforms etc.
Household allowance is to cover additional household expenditure incurred by you through fostering. This would include any additional household or car insurance, expenditure incurred from birthdays, Christmas and/or other religious festivals, attendance at school clubs or other organised activities, hobbies, purchasing glasses or having regular dental checks etc. If exceptional expenditure is anticipated that is not covered by your maintenance allowance, please discuss this with your supervising social worker before agreeing to anything. Additional payments based on the child or young person's needs may be met by Children's Services, however this cannot be assumed and must be agreed in writing with the child or young person's social worker.
Personal allowance is to cover things like pocket money, toiletries, £5 savings and mobile phone credit where appropriate. Foster carers are expected to save £10 per week on behalf of the young person and keep this in a separate bank account.
Transport covers local journeys (the first 150 miles) e.g. to school, health appointments, clubs, activities and contact with birth family and friends and normal family excursions. Payment for transport covers using your own transport and/or public transport. Please note that additional mileage can only be claimed if agreed in writing by the child's social worker, or at the placement planning meeting. Additional mileage is paid at 40p per mile.
If you wish to claim for additional mileage you will need to evidence that you regularly are driving more than 150 miles a week and that this cannot be avoided. Common sense should prevail when requesting additional mileage payments. e.g. if a foster carer drives 75 miles one week then 200 miles the next week Break would not expect the foster carer to make a claim for additional mileage, in the same way that Break would not expect foster carers to pay back money if they drove less miles. Your supervising social worker can provide you with a weekly mileage sheet to assist you with recording your mileage.
The above is a guide as to what is covered by your maintenance payment, but how you divide this will be up to you. As the maintenance allowance is paid in a lump sum you do not have to ring fence the money you spend, use it as and when you need it. e.g. if the young person needs a new coat costing £50 or a school uniform costing £150 then it is ok to pay this out of the £200. All the money does not have to be spent on the young person each week, it is a guide as to what will be needed and if not used it should be placed to one side to meet future needs.
Children with disabilities may be eligible for Incapacity for Youth or Disability Living Allowance. Foster carers should check with the child's social worker that an application has been made.
If you need to query a payment please contact your supervising social worker in the first instance. If you need to speak to the Finance Team their contact numbers are as follows:
| Name | Role | Telephone Number |
|---|---|---|
| Alan Flack | Finance Manager | 01603 672973 |
| Natasha Hall | Senior Finance Officer | 01603 672972 |
| Jeni Lawes | Finance Officer | 01603 672970 |
The finance team is based at head office and the address is: Finance Team, |
||
As a foster carer you are classed as self-employed and will need to register as such with His Majesty's Revenue and Customs (HMRC).
Foster carers may be eligible for tax relief called "qualifying care relief." An HMRC help sheet titled "Qualifying care relief: Foster carers, adult placement carers, kinship carers, staying put carers and parent and child arrangements" is attached to this guidance and can also be found at GOV.UK.
For further enquiries please contact the HMRC Tax helpline on 0843 504 7177. Please also see The Fostering Network website for helpful advice.
Please note that you will need to keep receipts for expenses that you have incurred through fostering e.g. purchasing clothing or equipment, as this can usually be offset against tax.
At the end of the financial year Break's Finance team will provide you with a letter breaking down the amount you have received for fees and maintenance allowance plus any agreed mileage payments and expenses that were paid in addition to this. You will need to keep this for your tax returns.
| Age of Child | Amount per Week |
|---|---|
| 5 – 7 | £2.00 |
| 8 – 10 | £3.00 |
| 11 – 12 | £3.50 |
| 13 | £4.50 |
| 14 | £6.00 |
| 15 | £7.00 |
| 16 (Paid if the young person is not on an independence plan until the young person completes Year 11) | £8.00 |
You must keep clear and detailed financial records concerning children's money. If a child or young person asks you to keep money or other valuables for them, you should record this. If the child is of sufficient understanding they should also be asked to sign to say they have given the item to the foster carer and also asked to sign return of the item. This is to protect both the foster carer from allegations and also to safeguard the child or young person's property.
You should make an inventory of the child or young person's belongings when they first are placed and also keep receipts or written records of the items they purchase for the child or young person during the placement. This will help to prevent any misunderstanding if and when the child moves placement.
You should spend an amount equivalent to one week's maintenance allowance to cover the costs of presents, parties, meals out or other related costs. No additional money will be paid for this because it is allowed for in the weekly maintenance allowance payments.
You have included in their weekly maintenance allowance money for holidays. This is equivalent of two weeks maintenance allowance.
To facilitate appropriate preparation for a young person's transition from care to independent living, young people who have completed year 11 may move towards greater financial independence as set out in the formulae below:
This means money previously paid to carers for pocket money, clothing money, toiletries, and bus fares etc. will be diverted direct to the young person and they will be expected to fund these things. Full details of the arrangement must be set out in the young person's Pathway Plan. The full independence allowance is £58.90 per week.
| Young People over 16 still in education |
|---|
| Young person receives an allowance of £58.90 per week. |
| Young person contributes to carer for keep £10.00 per week. |
| Young person retains £48.90 per week. |
You are no longer expected to provide clothing money, pocket money, toiletries, or bus fares in these circumstances. Your payments will be reduced by £58.90 per week to reflect this. Any money the young person earns through part-time/week-end work is disregarded (including summer work between academic years). Young people should be encouraged to learn the work ethic and to save.
Education Bursaries are exempt from these calculations as they are a direct payment to young people.
A young person in education or training aged 16-19 may be entitled to funds under the 16-19 Bursary. Students may receive a maximum bursary of £1200 a year at the discretion of their school, college or training provider. For more details go to GOV.UK.
The young person/carer/worker should contact the school, college or training provider for more details and to find out how to apply.
The amount a young person contributes towards their own keep will need to be worked out with their social worker and should be contained in their Pathway Plan.
The following example is based on the maximum figure (£115 per week) that Children's Services will count when assessing a young person's contribution:
Illustration: Young person's net earnings (after tax) of £115.00 per week
The young person's protected allowance is £58.90 per week. This is taken off the young person's net earnings and the young person contributes 50% of the remainder to the foster carer towards the cost of their keep:
e.g. £115.00 (net earnings) - £58.90 (protected allowance) = £56.10 x 50% = £28.05 ontribution per week. The young person therefore retains £86.95 per week. This is worked out as follows £115 - £28.05 = £86.95.
The foster carer no longer provides clothing money, pocket money, toiletries or bus fares.
In this illustration, payments to foster carer will be reduced by £58.90 per week (in lieu of allowance) plus further £28.05 which the young person provides direct (totalling £86.95).
The young person is to keep first wage packet before contributions start.
When a young person is unable to follow normal employment through sickness, disability or for some other reason, the £58.90 allowance will be paid. Any benefits, which the young person is entitled to claim, will be taken into account to determine the amount of the basic allowance payable. Young people will be expected to make a £10.00 per week contribution toward their keep, paid direct to you as the young person's carer.
Direct overnight or day-time care is offered by Break's 'respite carers' in accordance with Break's Additional Support Plan policy. Wherever possible, the same carer will look after the same child to enable a relationship to grow and flourish. The number of days provided will vary according to the needs of each child and their carers but will require additional funding from the local authority if the amount of support needed exceeds 20 nights in any year. In order to remove any negative references associated with the word 'respite', Break's foster carers who are registered to provide this service will henceforward be known as 'support carers' and they will provide 'overnight/stayover' or 'day' care for the child. Break will not deduct any money from your fee or maintenance allowance when you access 'support' care for your foster child.
In exceptional circumstances, e.g. following a serious allegation made against a member of the fostering household, Children's Services have the right to remove a child or young person from your care. If a child or young person is removed from your care pending an investigation, Break will continue to pay two weeks full fee and maintenance allowance.
It is not anticipated that there will be many circumstances where under or overpayments occur. If this does occur it will usually be because the date when a child or young person moved into or out of a placement was not communicated to the Finance Team. You will be paid on a pro-rata basis, so if a child moves in half way through a week or moves out half way through the week you will be paid for the number of days that the child stayed with you. To avoid overpayments please ensure that your supervising social worker is aware of any sudden changes e.g. if a child or young person suddenly moves out.
If you believe that you have been either under or overpaid please let your supervising social worker know as soon as possible. If your supervising social worker is not available please contact the Finance Team. The Finance Team will notify you of any overpayment in writing and the letter will request repayment to Break. Personal circumstances will be taken into consideration and a suitable timescale will be negotiated. Any underpayments will be rectified by the Finance Team as soon as practicable.
You can claim mileage at 45p per mile when attending training courses or support groups. Please keep journeys and therefore expenditure to a minimum by sharing lifts where possible. The mileage claim form is attached to this guidance.
Local Authorities must provide information about the possibility of extending a young person's living arrangements when they are 18.
If you feel that keeping the young person with you may be an option, the first Looked After Review following their 16th birthday should consider a Staying Put arrangement. This will mean assessing the implications for both the young person and your family.
Following the young person's 18th birthday, the legal basis on which they live in the foster home changes (the legal term is that the young person becomes an 'excluded licensee' lodging in the home) – this does not mean that the young person will be treated differently than when they were fostered.
Although Fostering Regulations do not apply to these situations there may be certain checks carried out over time. The Local Authority will need to assess and consider the appropriateness of these checks particularly where the young person is the only person living with you and it is not envisaged that further children will be placed.
Foster carers are approved rather than employed by their fostering service, and this status has a particular effect on means-tested benefits. In the main, fostering payments when a child is placed with a foster carer are disregarded when calculating welfare benefits. Alternatively, foster carers may be able to claim Working Tax Credit because fostering is regarded as 'work' by HMRC when they have a child in placement. Please see The Fostering Network website for more information.
If you foster you may in certain circumstances be eligible for National Insurance Credits which count towards your State Pension.
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.
Last Updated: August 6, 2024
v30
