Foster care can be an incredibly rewarding experience, but it also comes with a lot of responsibilities, including financial ones. While it can seem daunting at first, understanding the financial responsibilities of being a foster carer is essential for providing the best possible care for your foster child. In this post, we’ll dive deeper into the financial responsibilities of being a foster carer and provide some tips to help make it easier for you to adjust.
Understanding Allowances and Payments
Ensuring that the child in your care has everything they need is one of the biggest financial responsibilities of being a foster carer. The good news is that foster carers in the UK are eligible for an allowance and in some cases, additional benefits payments to help cover the costs of caring for a foster child. This money is provided to cover the cost of things like food, clothing, transport, and any other necessary expenses.
The amount of fostering allowance that you will be eligible for will depend on several factors including the age and needs of the child, along with your own circumstances. Many foster care agencies are committed to providing foster carers with an allowance that is equal to a full-time wage to encourage foster carers to commit to caring for the child full-time and remove the need for them to work in another job.
Budgeting for Foster Care
You will need to budget for the expenses that are related to foster care. Along with the essentials you will need to buy for your foster child, you should also consider the additional costs of:
- Household bills such as increased energy usage or water bills.
- Expenses related to the child’s hobbies and interests.
- Transport costs, such as driving or taking the child on public transport to school or appointments.
Creating a budget that considers all these additional expenses will help you more effectively manage your finances and ensure that you’re able to provide the best possible care for your foster child.
Tax and National Insurance
In the UK, foster carers are considered self-employed for tax purposes, meaning that you will need to register with HM Revenue & Customs and submit a self-assessment tax return each year. However, there are some tax exemptions and allowances available for foster carers that you can use to reduce your tax bill.
For example, you may be eligible for a tax-free allowance of up to £18,140 per year. You can also claim tax relief on some expenses related to fostering, such as additional household bills, clothing for your foster child, and related travel costs. Along with this, you will be exempt from paying National Insurance contributions on your fostering income, which can help to bring your overall tax bill down.
Understanding the financial responsibilities of foster care will help you ensure that the child in your care is provided with everything that they need. While it can be daunting at first, you should get an allowance that covers any additional expenses you incur, and there is lots of support available to help you get organised.
Read Also: 4 Activities to Break the Ice with an Older Foster Child
