Benefits for Specific Situations — Students, Carers, Veterans and MoreBenefits for Foster Carers — Financial Support and Tax Rules
Guide to benefits and financial support for foster carers in the UK in 2026. Covers fostering allowances, tax relief, how fostering income affects UC and other benefits, and the qualifying care relief.
Foster carers receive financial support through a combination of fostering allowances and generous tax relief. Here’s how the financial side of fostering works.
For the wider overview of carers’ support, disability benefits and related family caring routes, use the main Carers & Disability Benefits hub.
Fostering Allowances
Minimum Weekly Rates (England, Outside London) 2026-27
| Child’s Age | Minimum Weekly Allowance |
|---|
| Under 2 | £157 |
| 2-4 | £160 |
| 5-10 | £177 |
| 11-15 | £202 |
| 16-17 | £234 |
London Rates
London rates are approximately 15-20% higher than the national minimum.
Agency vs Local Authority
| Feature | Local Authority | Independent Fostering Agency (IFA) |
|---|
| Rates | Usually at or near minimum | Often significantly higher |
| Fee element | May or may not include a fee | Usually includes a professional fee |
| Support | Social worker and training | Often more intensive support |
| Retainer | Sometimes, between placements | More commonly offered |
Tax Relief: Qualifying Care Relief (QCR)
How It Works
Foster carers benefit from a generous tax exemption:
| Component | Annual Amount |
|---|
| Fixed threshold | £18,140/year |
| Per child under 11 | £375/week (£19,500/year) |
| Per child 11+ | £450/week (£23,400/year) |
Examples
Foster carer with one child aged 8:
- Tax-free threshold: £18,140 + (£375 × 52) = £18,140 + £19,500 = £37,640
- If fostering income is £25,000/year → Tax-free (below the threshold)
Foster carer with two children (aged 5 and 13):
- Tax-free threshold: £18,140 + (£375 × 52) + (£450 × 52) = £18,140 + £19,500 + £23,400 = £61,040
- Fostering income would need to exceed £61,040 before any tax is due
Most foster carers pay zero tax on their fostering income.
Registering as Self-Employed
Foster carers must:
- Register with HMRC as self-employed
- Complete a self-assessment tax return each year
- Report fostering income and claim QCR
- Pay Class 2 NI contributions (unless exempted by low profits)
Benefits Interaction
Universal Credit
| Income Type | How UC Treats It |
|---|
| Fostering allowance | Assessed as self-employment income |
| QCR tax-free element | Not counted as earnings |
| Profit above QCR threshold | Counted as UC earnings |
| Most foster carers | No countable income for UC purposes |
Other Benefits
| Benefit | Affected by Fostering Income? |
|---|
| Housing Benefit | Fostering income assessed (with QCR deduction) |
| Council Tax Reduction | Fostering income assessed (with QCR deduction) |
| Child Benefit (own children) | Not affected |
| Child Benefit (foster child) | Cannot claim for local authority foster children |
| Free school meals | Based on your qualifying benefit status |
National Insurance
| Situation | NI Contribution |
|---|
| Fostering profit below Small Profits Threshold | No Class 2 NI required (but can pay voluntarily) |
| Fostering profit above Small Profits Threshold | Class 2 NI (£3.45/week) |
| Class 4 NI | Only on profits above £12,570 (rare for foster carers) |
| NI credits | If receiving Child Benefit for own children, or through UC |
Benefits You Can Claim
For Yourself
| Benefit | Availability |
|---|
| Universal Credit | If you qualify (fostering income mostly disregarded) |
| Housing Benefit | If not on UC |
| Council Tax Reduction | Based on income assessment |
| PIP | If you have a disability |
| Carer’s Allowance | For caring for someone other than the foster child |
For Your Own Children
| Benefit | Availability |
|---|
| Child Benefit | Yes — for your own children |
| UC child element | Yes — for your own children |
| Free childcare | Based on qualifying criteria |
| Free school meals | Based on qualifying benefit |
For Foster Children
| Support | Available? |
|---|
| Local authority fostering allowance | Yes |
| Child Benefit | No (for LA foster children) |
| UC child element | No (child is ’looked after’ by LA) |
| Free school meals | Yes — through the school (funded by LA) |
| Pupil Premium | School receives Pupil Premium Plus |
Bedroom Entitlement
For UC Housing Element / Housing Benefit
| Household Member | Bedroom Allowance |
|---|
| You (and partner) | 1 bedroom |
| Your own children (under 10, same sex) | Can share |
| Your own children (10-15, same sex) | Can share |
| Foster child | 1 extra bedroom allowed (up to 1) |
| Approved foster carer (no current placement) | 1 extra bedroom allowed for up to 52 weeks |
The spare room for foster children means the bedroom tax does not apply to the room kept for foster placements.
Training and Development
| Support | Detail |
|---|
| Mandatory training | Provided and paid for by your fostering service |
| Additional training | Often funded by your service |
| Training fees | Tax-deductible if you pay them yourself |
| The Fostering Network | Professional body with resources and support |
| Local authority support groups | Peer support from other foster carers |