How Much Can I Earn as a Foster Carer?

If you are receiving foster carers’ pay (fostering allowance), you are still entitled to receive certain benefits, especially if you are a single foster carer.

They are eligible for tax relief, so pay none or hardly any tax on their foster care allowance (also known as a fostering allowance). Additionally, you might be eligible to claim Working Tax Credit.

Generally, it’s not. Income tax placed an exemption on foster care pay. Introduced by the UK government in 2003, it means you don’t need to pay tax on the first £10,000 your household makes in any year (the amount is less for shorter periods).

Foster care pay is subject to additional tax relief of up to £250 a week for every week a child is in your care. To work out what all this means for you, follow this simple guide on the government’s website.

For the purposes of calculating the tax on your foster care pay, HMRC treats foster carers as self-employed. You’ll have to fill out annual tax return forms, which you can find guidance for on this page of the government’s website. You can also call HMRC to request a copy – ask for an IR 236 help sheet. Read more about foster care pay on our Financial Support page.

Yes, the UK government requires that foster carers pay self-employed National Insurance contributions. You must register as self-employed when you become a foster carer. If you’d like extra information or some help setting up, call the Newly Self-Employed Hotline on 0300 200 3504.

Some foster carers do receive tax credits like Working Tax Credits and Child Tax Credits (if you have a child of your own). The amount depends on quite a few variables, including how often you work, how old you are, and how much your household income comes to.

Everyone’s situation is different, so it’s best to contact HMRC for an assessment. You can call them on 0345 300 3900.

Eligibility to claim benefits depends on your individual circumstances, so our advice is to contact the Department of Work and Pensions direct. However, there are some general trends you might find useful to know.
If your benefits come from a local council, voluntary organisation, or a private organisation on behalf of the local council, paid foster work shouldn’t affect your benefits. If you claim Universal Credit, Jobseeker’s Allowance, Income Support, or Employment and Support Allowance, paid foster work could affect your benefits.

The best way to find out where you stand is to contact your local Jobcentre Plus. You can find the phone number you need on the Job Centre Plus contact page. Alternatively, seek specialist advice from an advisory agency like the Citizen’s Advice Bureau.