Money Matters and Insurance
Once you have completed the preparation training and have a child placed with you, you will receive a Child Allowance and a Skills Payment for each child placed. The Child Allowance is based on the age of the child and is to cover their costs. The Skills Payment is based on your skills level as a foster carer and will change if you choose to progress up the skills levels through training and development. –More details can be found below in Section 2, Aged Based Child Allowance and Section 3, Payment For Skills.
If you have any queries about allowances or if you think you have been under or over paid, contact the Finance Hub on 01709 822565 or 01709 255875 or email CYPS-FinanceHub-Fostering@rotherham.gov.uk as soon as possible. For more information about what happens if you have been overpaid, please see ‘CYPS Overpayment in Respect of Fostering’.
Payments to you are made direct to your bank or building society. When you are approved as a Foster Carer, you will be set up on the Control payment system and the provider portal, where you will be able to log in and check your weekly remittances (payments).
After Monday 5th October 2020, any newly approved carers or carers taking a new placement will be paid in arrears.
Payments for any children placed before 5th October 2020 will continue to be paid in advance until that placement ends. If a carer has any children placed before Monday 5th October 2020 and then has an additional child placed after 5th October, the additional placement will be set up to be paid in arrears even though the current placement is already being paid in advance.
For every child or young person in your care, you will receive a weekly child allowance. The amount you receive depends on the age of the child.
Allowances are reviewed regularly in line with government recommendations. More information about weekly allowance rates can be found in the Resources section in the ‘Foster Carer Allowances and Payments'.
The child allowance is provided to cover the cost of the following for the child:
- Food;
- Toiletries, including medication, the majority of which is available at no additional cost;
- Toys and play equipment;
- School trips, some residential trips. (If the foster carer feels the cost of this is beyond funding through the fostering allowance, discussion needs to take place with the child’s Social Worker or with the school in respect of use of pupil premium);
- Activities – the cost should not be a barrier to child undertaking a regular activity as agreed in their care plan. Funding would be agreed as part of the care planning process. (If the foster carer feels the cost of this is beyond funding through the fostering allowance, discussion needs to take place with the child’s social worker);
- Clothing;
- Pocket money;
- Mobile phone top ups;
- Bus fares and mileage to school within a 3 mile round trip;
- Contribution to household costs, for example, heating, lighting;
- Day to day transport, either by car or public transport;
- Family day trips;
- Personal allowance for social activities e.g. cinema, bowling, swimming;
- General appointments local to the placement. (If the foster carer feels the cost of this is beyond funding through the fostering allowance, discussion needs to take place with the child’s Social Worker due to complex health needs).
This list is not exhaustive. Further guidance can be obtained from your Supervising Social Worker.
We are keen to encourage all children in care to experience a wide range of extra curricular activities such as music, arts and sports. Foster carers will generally be expected to fund such activities from the weekly allowance If the foster carer feels that the cost of this is beyond funding through the allowance, discussion needs to take place with the child’s social worker and the supervising social worker. It should be noted that additional funding will only be agreed by the fostering service manager who needs to be advised as to the projected spend before any agreements will be made.
Included in the child allowance rate is an age based allowance for pocket money and an age based allowance for clothing.
All children should receive a weekly pocket money payment. Dependent on the age and ability of the child, pocket money should either be given in cash or paid into an account accessible bank account. Pocket money should be paid to the child weekly or a proportion of it, with the rest saved. Pocket money is not to be confused with other expenditure given to the child for activities.
For any child in a long term placement, the foster carer is expected to open a bank account for savings. For any children in a short term or task placement, any money not given in hand will be saved and recorded. The child will then take this money with them when they move on from the placement.
If a child is accessing second home (respite) care, the primary foster carers should ensure that the respite foster carers are in receipt of the child’s pocket money for the period that the second home care covers. Alternatively, the pocket money for this period may be given directly to the child, dependent on age.
Clothing allowance should be spent on providing appropriate clothing for the child. Depending on the age and ability of the child you may agree with them they have access to some of this money to allow them to buy clothing for themselves. This should be discussed with the child’s social worker and form part of their care plan.
For up to date pocket money and clothing allowance rates please see the Foster Carer Allowance and Payments.
You will receive a Skills Payment in addition to the Child Allowance. The Skills Payment reflects your assessed level of skill as a foster carer in conjunction with your training and development level and your attendance at fostering support groups.
Rotherham Borough Council's Fostering Service have developed a Skills Level Payment Scheme that allows you to progress through skills levels for which you receive a higher skills-based payment as you gain more experience and develop your skills through training and hands-on experience.
This scheme is known as the Foster Carer Payment for Skills Model and the Tasks, Skills and Competencies Framework. The model underpins the Fostering Service’s commitment to achieving best possible outcomes for fostered looked after children supported by skilled, motivated and rewarded foster carers. The model provides clear entry requirements and post approval expectations for each level, including training and development and support group attendance so that you know exactly what you are required to do to maintain your skills level and to move up to the next skills level if you want to do this.
The Tasks, Skills and Competencies framework for each level of the model is set out under the five outcomes of the “Every Child Matters” framework which means it covers all the areas of a child’s needs. For more information see Foster Carer Payment for Skills (PFS) Model and the Tasks, Skills, Competencies (TSC) Framework.
Most newly approved foster carers will enter at level 1 however there may be instances where an applicant demonstrates specific experience that means they may be eligible to enter at a higher level. In this instance, the assessing social worker will use the entry level skills level model to determine which level the applicant should enter at post approval and will provide evidence that the applicant can meet the expectations and skills for that level. The applicant will be required to undertake the training required for any lower levels within the timeframe set out in the entry level skills level model. For more information see Assessment of Prospective Foster Carers and the Foster Carer Payment for Skills (PFS) Model.
Skills payments are paid based on your abilities and not on the needs of the particular child placed with you. A skills payment is paid per child placed. Skills payments are always paid in addition to the weekly child allowances and birthday, cultural celebration and holiday monies.
For more information about the specific rates for Skills Payments please see Foster Carer Allowance and Payments.
Fostering Rotherham acknowledge the need to be able to offer a bespoke package of support to children, young people, and their foster carers where there are specific complexities in caring for a child. The Enhanced and Complex Care Payment structure is used to provide additional financial support to carers in such circumstances. Below you will find information about the criteria for these payments and the assessment and review process. For information about the specific rates please see the Foster Carer Allowance and Payments Enhanced Payment Criteria.
Enhanced Payment is an increased payment to foster carers caring for children with more complex emotional, behavioural and/or health needs. For example;
- Children and young people with registered disabilities who are known to the Children’s Disability Service and have an EHC plan in place;
- Teenagers on the edge of residential care;
- Children and young people who are assessed as high risk of child sexual exploitation (CSE) and child criminal exploitation (CCE). Children in this category would be known to the Evolve Team who would contribute to the assessment process;
- Children and young people who pose a risk of sexually harmful behaviour/sexualised behaviour to themselves or others;
- Children with a history of violent behaviour towards adults/carers/other children that is well known and documented;
- Carers who are caring for large sibling groups (three or more) or three unrelated young people aged 11 years plus.
Complex Care is an increased payment available to foster carers caring for children with a higher level of complex care needs;
- Children who have previously been in residential care (step-down);
- Teenagers in crisis requiring emergency care;
- Parent and child placement;
- Children and young people who have experienced significant trauma because of multiple placements moves and/or adoption breakdown who may require intensive therapeutic support and who have an EHC plan in place that reflects this.
Assessment Process
Enhanced and Complex Care payments must be based on the needs of the individual child. Therefore, it is essential that the child’s allocated Social Worker is consulted before making an application.
The child’s Social Workers’ views and the views of the Independent Reviewing Officer must be incorporated into the assessment. Any discussions about Enhanced Payments or Complex Care Payments should take place at the earliest opportunity, for example, placement planning meeting (for a new placement) or pre-disruption meeting and this must be clearly recorded.
The Supervising Social Worker is responsible for discussing, agreeing and coordinating the application in principle before completing a Managers Decision Record (MDR). The MDR must document the assessment to support the application. Upon completion, the MDR must be sent to the Team Manager for their recommendations and then this will be sent to the Service Manager for authorisation.
Review
Enhanced and Complex Care Payments are subject to regular review through foster carer supervision, looked after children’s and foster carer reviews to ensure that the payment is still required.
The Enhanced and Complex Care Payments will also be reviewed in case supervision between the Fostering Team Manager and Supervising Social Worker unless otherwise stated at the point of approval.
If a decision is made that the payments are no longer required, for example the child/young person’s needs are not as complex or they move from the placement, then the Supervising Social Worker is responsible for ceasing the payment and a MDR placed on the carers file to evidence the reason for the decision.
Only in exceptional circumstances should the foster carer take a holiday without the child where the child has to be placed with an alternative carer. If you are planning a holiday without the child, you must speak to the child’s social worker as well as your fostering social worker, so that a clear plan can be put in place.
Please note that it is expected that all foster carers, wherever possible include the foster children in family holidays, which must be taken during the holiday period if the child/ren are of school age.
In addition to respite being used for holiday provision it may also be utilised to allow carers to attend emergency appointments and allow carers to attend training.
If an RMBC respite carer is used, the primary carer will receive up to a maximum of 14 days payment which includes child allowance (including clothing and pocket money allowances) and skills payment. The foster carer will not receive the child allowance or skills payment if they take a holiday which extends beyond the 14 day period. In effect this is the equivalent of two weeks paid holiday.
Second Home carers (also known as Respite care) are paid at the nightly rate of the basic child allowance (ie not including the clothing and pocket money allowances). The Second Home carer will also receive a skills level payment for the period the child is placed at the rate applicable to their own assessed skills level.
If a child is accessing second home (respite) care, the primary foster carers should ensure that the respite foster carers are in receipt of the child’s pocket money for that period. Alternatively, the pocket money for this period may be given directly to the child, dependent on age and ability.
Foster carers who provide day care for other foster carers will be paid the age based child allowance plus their assessed rate of skills payment. This is calculated by dividing the relevant age based child allowance plus the relevant skills payment by 7 to determine the rate per day. To see a breakdown of these rates please see Foster Carer Allowance and Payments.
This is a separate scheme to mainstream fostering and is specifically for children who are not in the looked after system as such therefore carers are paid at a different rate. This is the support service offered to children with disabilities. For more information about specific rates please see Foster Carer Allowance and Payments.
The weekly fostering allowance contains a transport element for day to day journeys e.g. local appointments, day trips, car parking, up to 40 miles per week for journeys specific to the child. The transport element is included in each individual child’s fostering allowance. Where the child’s transport requirements exceeds this amount this should be discussed and agreed with the supervising social worker. Mileage over 40 miles per week should be claimed at 45 pence per mile.
Exceptions to this will be:
- Regular contact with family / significant others;
- School journeys over and above the 3 mile round trip;
- Other journeys as agreed by the supervising social worker e.g. daily hospital visits, long distance journeys for contact;
- Introductions to a child that is not yet placed with the foster carer or transitions to another placement;
- Training / support groups / consultations events;
- Taking a child to respite;
- Provision of family support.
The above should be agreed through the care planning process and discussions with the child’s social workers as well as being covered during foster carers supervision and within the carers professional development plan if relevant. Any expenditure must be agreed in advance. Claims should be made on the foster carer’s mileage sheet which can be found in the Resources section of this handbook here and should be made within a 3 month time period. Claims made later than 3 months may not be reimbursed.
When a child first arrives there may be a need for extra money to buy clothes. Please discuss this with your supervising social worker.
An initial clothing allowance is not paid automatically. This is subject to the needs of the child and is discussed with the supervising social worker and child’s social worker when a child is first placed and should be discussed in the placement agreement meeting.
Payments are subject to fostering team manager approval for expenditure up to £200. Anything above £200 (e.g. for sibling groups) would need service manager approval.
When an agreement has been made to pay an initial clothing grant this will be subject to the needs of the child and in exceptional circumstances the full initial clothing allowance will be made. In any event the initial clothing grant cannot exceed the amounts listed below.
The following figures should not be considered as an amount of payment that the child is entitled to.
| Age Group | Clothing Allowance |
|---|---|
| 0-11 | Up to £75 |
| 11+ | Up to £200 |
This payment is only paid when the child is first admitted in to care. The purchasing of additional clothes is then to be budgeted from the weekly allowance.
Receipts must be kept for any purchases made by the foster carer with this allowance and claims must be made within a 3 month period otherwise they may not be reimbursed.
Allowances for school uniform can be negotiated when a child is first accommodated and if they change schools and require a different uniform. This will need discussion with the supervising social worker and is not automatically paid. If receipts are not provided the payment will not be made and will not be reimbursed by the fostering service. Claims must be made within a 3 month period otherwise claims may not be reimbursed.
An initial cost of up to £50 will be considered for a child aged up to 10 years and £70 for a child aged 10 plus.
Funding the further replacement and purchasing of school uniform should be discussed with the fostering social worker as the weekly clothing monies should contribute towards replacement school uniforms and is the responsibility of the foster carer and should be budgeted from the weekly allowance.
The cost of obtaining birth certificates (and copies), passport’s and life story books will be met by the fostering service.
When a foster carer is first approved or subsequently approved for additional placements, they can receive set up costs to assist them with the purchasing of equipment. A maximum grant of £500 will be paid. Receipts must be provided to the Fostering Service. Equipment purchased needs to be agreed in advance with either the assessing social worker or the allocated supervising social worker.
No grants will exceed the maximum allowance. The replacement of equipment is to be discussed with the fostering social worker, team manager and ultimately any agreement for funding is at service manager level.
In the case of babies – it is expected that a new mattress will be purchased for each new placement and the foster carer will be reimbursed.
Payment for items should not be made by credit card / debit card as the local authority is unable to claim back VAT. Generally any equipment would be bought through purchase to pay arrangements through contracted suppliers. If equipment is purchased by the foster carer, this must be agreed in advance and receipts provided. Claims must be made within a 3 month period otherwise claims may not be reimbursed.
For Foster Carers who are supporting adoption transitions, a hospitality allowance may be agreed of up to £10 per day for the period of adoption transitions to cover any expenses incurred whilst hosting adopters.
Any overnight hotel stays required during transition plans will be funded by the Adoption or Looked After Children’s teams. Any other expenses incurred during adoption transitions such as any meals not included within a hotel package will be reimbursed if receipts are provided within a 3 month time period. Alcohol will not be included, and foster carers are expected to take a common sense approach to the cost of meals.
Day care rate will be paid for any care provided as part of an agreed transition plan after the child has left the placement.
This welfare benefit can be claimed for any child with a disability. The foster carer is expected to use the DLA to promote the welfare of the child and to assist them in the child’s care. This should be paid in to a dedicated bank account in the name of the child with the agreement of the child’s social worker.
The child’s social worker is responsible for the oversight of its use in partnership with the foster carer. In exceptional circumstances, the child’s social worker may take a more direct role in administering the account.
Any surplus that is built up remains the property of the child and goes with the child when they leave the placement.
Any mobility allowances should be spent to promoting the child’s mobility, for example, taxi fares, bus passes.
If you are in receipt of the 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).
When you are fostering, you will need to be registered as self-employed and file tax returns. See File Your Self Assessment Tax Return Online.
You will be entitled to qualifying care relief which means that you will be entitled to:
In a tax year, households do not pay tax on a fixed amount of the money they earn from fostering. You will still pay tax on money you earn from a job or investment.
On top of this exemption, you also get tax relief for every week (or part week) that a child is in your care.
All payments made to you will be itemised. You should keep this information as a record for income tax purposes.
For further information and current figures, please see: Foster Carers Relief Information (HMRC) and Help and Support for Foster Parents in England.
You should keep receipts for any expenses where you need to claim reimbursement.
You must inform your Home, Building and Contents and Car insurance company that you have been approved as a foster carer.
You should tell them about the numbers of children and age ranges you expect to take. 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.
Foster carers will be expected to have the relevant insurance cover for any damage. It will only be in exceptional circumstances that an insurance claim can be made against Rotherham’s public liability insurance. Such claims will be considered by the fostering service manager.
All foster carers, where applicable, are expected to have fully comprehensive car insurance. The insurance certificate needs to state the car is used for business use or as a foster carer. It is the foster carer’s responsibility to ensure all documentation is kept up to date in relation to cars, e.g. MOT certificate, renewal of insurance.
These documents must be available for the supervising social worker to check as part of the Annual Health & Safety Check.
If you foster you may be eligible for National Insurance Credits which count towards your State Pension. See GOV.UK: National Insurance Credits.
This includes:
- Regulation 24 Connected Carers (also known as kinship carers) will receive the child’s allowance from the day of placement. They are expected to undertake checks and assessments and some basic training prior to being approved as Regulation 38 foster carers. For more information about the progressions requirements for Kinship Carers please see Foster Carer Payment for Skills (PFS) Model and the Tasks, Skills, Competencies (TSC) Framework;
- Foster to Adopt carers (prospective adopters who are approved to foster children prior to the child being freed for adoption). Skills payments will not be made;
- Child Arrangement Orders. This piece of private law enables children to receive care from people whom the court deem appropriate rather than become ‘looked after’. Where this is the case the holder of the Child Arrangement Order will receive an allowance from the date of the order, providing the child is placed at that point. Skills payment will not be made;
- Foster Carers who offer children a permanent family via an Adoption or Special Guardianship Order.
The Local Authority recognises that in many circumstances it is right for children to achieve permanency with their foster carer through an SGO or adoption order.
Foster carers will continue to receive the child age based fostering allowance, plus any skills payment however, child benefit will be deducted from this amount and birthday, festival and holiday allowance will not be included. The foster carer will continue to receive the same fostering fee they were receiving at the date the Adoption or Special Guardianship Order was made for a period of 2 years. Following this, a means tested financial assessment will be undertaken.
N.B. Children under SGOs who go on to higher education or children who have a disability are also entitled to continuing support beyond the age of 18 years.
Last Updated: May 8, 2025
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