Fostering Allowance
Lotus provide foster carers a competitive fostering allowance for every child living in your home. This includes both the professional fee paid to you as a foster carer and the child’s living allowance. You’ll begin receiving your fostering allowance as soon as a child is placed in your care. The amount you’ll receive varies but will cover expenses including maintenance, clothing, pocket money, leisure activities, and travel expenses.
Our foster carers receive a foster care allowance from £420 to £650 per week, depending on the age of the child and the type of placement. This may be higher in some circumstances.
Tax Exemption
HMRC provides a fixed tax exemption of up to £10,000 per year (or less if you foster for a shorter period). This tax exemption is shared equally between all foster carers in the same household. This tax exemption means you won’t pay tax on the first £10,000 you earn from fostering.
Tax Relief
You will also benefit from a weekly tax relief while you have a child placed in your care. This tax relief is on top of the £10,000 tax exemption meaning you won’t have to pay tax on some of your earnings over £10,000.
The weekly amount of tax relief is dependent on the age of the foster child in your care:
For each child under the age of 11 in your care, you will benefit from a tax relief of £200 each week.
For each child aged 11 or over in your care, you will benefit from a tax relief of £250 each week.
The below foster carer allowance examples will give you an idea of how the tax allowances work. All examples are for illustrative purposes only and are based on a 52 week placement. The actual amount you will receive may vary from the example
Example
Example 1
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Simon fosters full time, a 15-year-old boy on a long term so has cared for him for a full tax year.
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Tax relief = £10,000
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Tax Exemption – 52 weeks at £250 = £13,000
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Total Tax Threshold = £23,000
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Simon’s Total Fostering Allowance = £22,000
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How Much Income Simon Pays Tax On = £0
Example 2
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Amy fosters a 13-year-old girl for a full year but then has a 7-year-old placed with her for 14 weeks.
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Tax relief = £10,000
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Tax Exemption – 52 weeks at £250 = £13,000
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Tax Exemption – 14 weeks at £200 = £2,800
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Total Tax Threshold= £25,800
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Amy's Total Fostering Allowance = £28,000
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How Much Income Amy Pays Tax On = £2,200
Tax depends on your personal circumstances and other sources of income, but with expert tax advice from Foster Talk, this will be simple to calculate. Foster Talk’s tax accountants can even manage your tax return on request for a small administration fee.
"Children benefit from the fostering agency’s protocols and procedures regarding the prevention of COVID-19. This preventive work has helped to keep children and foster carers safe throughout the pandemic."
Meet The Team
Lotus Foster Care was set up by a team that has extensive knowledge of the sector, having worked in a range of roles from overseeing large organisations, managing local authority teams, and fostering.
