Money Matters

At Leicestershire County council, we understand that people foster because they care, and they want to make a difference to Leicestershire’s’ children and young people in care.  However, we also understand that it is vital that our carers receive payment for their skills, efforts and work with us.

Our payment levels enable our carers to progress, with our support and guidance and receive fair payment for their vital roles.

The weekly fostering allowance is the amount that is paid to foster carers whilst they have a child in their care and does not include the skills fee that they are paid in addition to this. These rates are free from income tax, as long as they do not exceed the qualifying amount. Payments to you are made one month in arrears, direct to your Bank or Building Society, (please see Local Resources for details).

The skills fee is an amount paid on top of the fostering allowance to recognise the carers’ skills, experience, learning and development. All mainstream foster carers will start on level 1 and will progress through the levels when they have met the 

1. Clothing Allowance;
   
   In cases where children or young people arrive in an emergency with no clothing, or inadequate clothing, a payment can be made direct to the foster carer.
   
   
2. School Uniform Allowance;
   
   The department provides additional help with school uniform when:
   • A child starts primary school;
   • A child changes school;
   • A child starts secondary education.
3. Birthday Allowance;
   
   The Birthday Allowance is equal to one week’s Fostering Allowance and is paid automatically just before the child’s birthday for gifts and celebrations.
   
   
4. Festival Allowance;
   
   The Festival Allowance is equal to one week’s Fostering Allowance and is paid automatically at the beginning of December. If you would like it to be paid instead for another major religious festival please let your supervising social worker know.
   
   
5. Holiday Allowance;
   
   These payments are age-related and are based on two weeks of the basic fostering allowance. Payments will not be made automatically, but will have to be claimed by foster carers at the appropriate time.

6. School Trips Abroad;
   
   Educational trips for children are important for their development and consideration should be given to a number of possible funding sources including pupil premiums, a child’s Personal Education Allowance (PEA), corporate parenting team and fostering allowances that carers receive, including the holiday allowance.

All carers under the specialist schemes are paid according to their skills, availability, and type of fostering they are committed to. Our specialist schemes include One 2 One, Pathway carers, Aspire, Out of hours Emergency care as well as Parent and Child carers. If you are interested in our specialist schemes, please see local resources for further details. Our Respite carers and Short break carers are also paid a slightly amended rate of pay. 

If you have any queries about allowances, or if you think you have been under or over paid, please contact our Finance Section in the Fostering Service as soon as possible at FPS.Finance@leics.gov.uk.

Foster carers allowance includes an element for pocket money and money towards children’s savings. It is expected that all school age children should be given pocket money either as cash or money for their bank account. Setting fixed amounts of pocket money and savings is problematic and consideration must be given to individual circumstances of children in care and foster families. You will find a suggested guideline in Local Resources. However we are aware that circumstances vary from household to household and what a carer already provides for the child by way of treats, leisure activities, mobile phone contribution, should be considered in this decision, as well as offering ‘extras’ potentially for Birthday & Christmas presents from family members and chores within the home if appropriate.

It is generally agreed that helping young people to develop the habit of saving money is a good thing. Foster carers play a vital role in helping their foster children develop those good habits. The ability to manage money and budget is an important skill which lay the foundation for successful transition to adulthood. Having a savings account is one part of this. When children have been looked after for more than one year, it is expected that their foster carer opens a savings account on their behalf. Most of the high street banks and building societies have special children’s savings accounts which often pay a higher rate of interest. Money can be withdrawn when needed and, in most cases, needs a responsible adult to authorise withdrawals.

Since January 2011 it has been possible for children to have a Junior ISA. This is a savings or investment account which anyone can add money to up to £9000 per year. The money can’t be withdrawn until the young person is 18. When young people are looked after continuously for more than 12 months, the Government will set up a Junior ISA on their behalf with a start-up contribution of £200, unless they already have a Child Trust Fund or Junior ISA in their name.

• Discuss with your Supervising Social Worker and the Child’s Social Worker what arrangements to put in place regarding savings for your foster child. Which type of account and how much to save will depend on the age of the child and a host of individual circumstances. Agreements can form part of the Placement Plan and be regularly reviewed as part of Review of Arrangements Meetings;
• If your foster child leaves your care before they are 18, either to go to another foster placement, back to parents or other family members don’t forget to pass on details of any savings so that they stay with the child and records can be kept up to date;
• When your foster child is 18 and either leave your care or ‘Staying Put’ they will hopefully have a ‘nest egg’ to help them with the first steps to independence.

As always your supervising social worker and the child’s social worker will be your first port of call. Further information is available on the following websites:

GOV.UK

The Share Foundation

Money and Pensions Service

The child you care for may be in receipt of DLA or PIP. These are tax free benefits for children (and adults) to help with the extra costs incurred by a disability. Some children or young people may be receiving or entitled to receive DLA or PiP, where their caring or mobility needs are significantly higher than would be expected of another child or young person, of their age and stage of development. DLA and PiP are not based on the disability, but the needs arising from it. DLA is paid to children who are under 16 years old when they claim, but may be paid to them after their 16th birthday, and they will be reassessed for PIP between their 16th and 18th birthdays. New claims for children and adults between 16 and 65 years old will be for PiP. 

Please refer to DLA and PIP policy in 1.1 LCC Policies and Guidance (Local Resources).

Expenses are paid by the Fostering Service for such as making trips to hospital, attending reviews, contact arrangements or other exceptional travel expenses. This will be at a set rate per mile at the discretion of the local authority. Mileage claims will be uploaded by the foster carer onto the online portal system

Please refer to Payments and Allowances in 1.5 Useful Information (Local Resources).

You should keep a record of how your allowance is being spent to support a child or young person whilst placed with you. You should keep receipts where possible and submit these to your Supervising Social Worker monthly.

The cost of getting birth certificates (and copies), passports and Life Story books will be met by the Fostering Service.

A tax year runs from 6 April in one year to the 5 April in the next. HM Revenue and Customs (HMRC) always works retrospectively, so will ask you to submit information to them about the previous tax year.

Since April 2003, ALL foster carers have been treated as self-employed (including foster carers who provide respite care and family and friends foster carers). At this time, HMRC introduced a specific tax scheme for foster carers (‘foster care relief’). In April 2010, foster care relief was extended and renamed ‘qualifying care relief’. This allows foster carers to receive payments from their fostering service up to a certain level (called your tax threshold), without being liable for tax.

Qualifying care relief covers foster care, shared lives care (formerly called adult placement), staying put care (where a young person who was fostered remains past their 18th birthday), and parent & child care.

Many foster carers have little or no taxable profit from fostering, because the qualifying care relief tax scheme is fairly generous. However, a foster carer needs to do a simple calculation at the end of each tax year to find out what their tax threshold is for the tax year and whether they have any taxable profit or not. We advise foster carers not to compare themselves with other foster carers. The simple calculation will be unique to you and your circumstances and therefore your threshold is also going to be unique to you.

Your tax calculation can be done

• Online at: www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed;
• By telephone via the Newly Self-employed Helpline on 0300 200 3504;
• You can register in writing by filling in a form CWF1 – this form is designed to be filled in on screen. You cannot save the form but once you have completed it you will be able to print a copy and post it.

If you are unclear or concerned about this the Fostering Network Support Line offers information and you can get a Fostering Network explanation sheet from your SSW.

If you foster, you may be eligible for National Insurance Credits which count towards your State Pension.

If you are in receipt of Disability Living Allowance, you may find that fostering affects your entitlement.

If you are in this situation you should seek advice from the Benefits Agency or Citizens Advice Bureau (CAB).

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 foster. You should ask your insurance company for written confirmation that they have included your role as a foster carer and your foster children on all of your policies. A copy of confirmation letters should be given to your Supervising Social Worker.