Fostering caring fees, allowances and expenditure

Foster caring fees

Fostering fees are the financial reward for foster carers. They acknowledge the time, skill and effort involved in caring for a child or young person. Mainstream fees are age related. Specialist fees are not age related. The carer is paid a fee for each child or young person placed. Updated information is issued annually to foster carers, detailing the fee applied for that year.  

Short break foster carers are given the relevant fee i.e. mainstream/specialist, plus allowances, on a pro-rata basis for each child or young person. 

At times foster carers may offer support to children, or young people, or our service, in other ways. This could include befriending, which is paid at an hourly rate, training, or a recruitment task, where a one-off fee is given.

If a FBC social worker has assessed a foster carer’s capacity to offer out of hours placements, on an emergency basis, and the foster carer agrees, their details will be shared with The Emergency Social Work Service (ESWS). The foster carer will receive a fee for that period. This will be paid at a mainstream rate. They will receive the standard allowance if a child or young person stays.

Allowances

Fostering maintenance allowance is the financial support for a child or young person. This is paid to their foster carer, who are then required to use this to cover the child or young person’s normal day to day living costs. Normal day to day costs include, although are not exclusive to, food, local travel, hobbies, activities, including play and social and personal hygiene products and services.  Where a child or young person’s needs indicate additional expenditure may be required due to their disability, their carer should apply for appropriate disability benefits. 

Maintenance allowance is only payable when the child or young person is in placement with the foster carer. Maintenance allowances cease when the child or young person leaves the placement. If they go home overnight or have regular or occasional short breaks, the foster carer will receive an adjusted proportion of the maintenance allowance.  If the maintenance allowance is not deducted when a child returns overnight to family, this can be given in cash or kind to support the child or young person during this period. Maintenance allowances are calculated annually, and updated information is circulated to foster carers.  

Once young people have an income independent from the fostering allowance, they may be required to contribute towards their clothing and personal expenses. A table of expected contributions from young people is detailed in the annual information relating to allowances. The young person’s social worker and FBC social worker should be advised when a young person is in receipt of earnings or benefits. 

All care experienced young people who stay on at school beyond school leaving age or go to college are entitled to an education maintenance allowance or care experience money. Foster carers should ensure that they or the young person apply for this allowance, as it is intended as an incentive for young people to stay on at school or go to college. It is paid directly to the young person.

Retainers

Retainers are paid to full time foster carers in recognition that they are available to take placements. A retainer can be paid for up to four weeks for mainstream foster carers and 12 weeks for specialist foster carers. Occasionally retainers can be paid for longer, for instance if there is a bereavement or serious illness within the family. This must be agreed with the FBC team manager. 

Where a foster carer is suspended from taking placements due to a child protection or standards of care investigation, a retainer can be paid for up to 12 weeks, if agreed by the FBC team manager. 

Occasionally the demands of a child or young person in placement means that no other placements can be made, even though their remit and registration allows. In these circumstances, a second fee may be payable following discussion with the child or young persn’s social worker, the FBC social worker and authorisation by the FBC team manager. This payment will be reviewed quarterly. 

Clothing allowance

The weekly amount of clothing allowance for each child or young person depends on their age and is detailed in the fees and allowances information sheet that is issued annually. The clothing allowance must be used to ensure that the child or young person is clothed to a good standard, and any items are renewed or replaced as necessary. All clothing purchases should be recorded, and receipts kept. These should be made accessible to your FBC social worker upon request. How the clothing allowance is spent is a matter of judgement between the foster carer, the child or young person, their parents, and any social worker.  All clothing should be purchased as new and be of a good quality. Any unspent clothing allowance should be returned to the carer payments team, and upon arrangement with your FBC social worker. Exceptional one-off payments may be made for expensive items, e.g. if the child or young person is taking part in a special religious ceremony. Such needs must be discussed with the child’s social worker and FBC social worker in advance. 

Short break foster carers do not receive clothing allowance as it is expected that the child or young persons’ clothing is provided by the parents, or substantive foster carers. When children and young people are placed with foster carers immediately from their family, their clothing is not always made accessible. In situations such as these, a pre-agreed grant will be agreed with your FBC social worker. Receipts should be retained and passed to them. 

Parents may wish to provide clothing. It is helpful if foster carers can accommodate parent's views as far as practicable. It is expected that when the child or young person leaves the placement, they will have a good standard of clothing. Foster carers should make an inventory of clothing when the child arrives or leaves, so that the child’s clothing needs can be assessed, and disputes avoided.  

Pocket money

The minimum pocket money allowance forms part of the maintenance allowance. The finance slip that is provided to foster carers weekly clearly defines the standard maintenance allowance from the clothing and pocket money allowances. A child or young person who is visiting on short breaks from the community will not receive the pocket money component of the allowance. Those who are already living in a foster care placement will continue to receive their pocket money from their substantive placement. Children and young people should be encouraged to open a savings or bank account. For babies and young children, foster carers often save on their behalf. This is a good practice standard. For those foster carers who have transferred from another agency, with a child or young person that remains with them, then any savings which have accrued will be discussed and accounted, as part of the best practice transfer meeting. This helps avoid any later disputes.

Christmas, or other religious festivals, and birthday allowances

These allowances are paid to cover additional expenditure at one week’s standard allowance. Christmas allowances are paid four weeks prior to Christmas. If a child or young person moves just prior to their birthday or Christmas, the purchased gift(s) should be passed to the new foster carers as these allowances are not paid twice. Foster carers, where possible, should always seek the views of a child or young person’s parent in relation to any gift which is purchased.

Holiday and school trip allowances

Before booking any holiday for a child or young person who is placed in your care, this should be discussed and pre-authorised with the child or young person’s social worker and the FBC social worker. Discussions should take place well in advance to allow sufficient time for planning. This ensures that all necessary agreements are in place, from parents and the child’s social worker in terms of authorisation and considerations of any legal orders in place, or conditions. It also enables arrangements to be considered, for instance concerning passports, and support plans and risk assessments to be completed. 

A holiday activities allowance is paid to all foster carers in their May payment. This is to cover additional expenditure over the school summer holiday period, such as day trips or clubs. It is paid at the equivalent of two weeks standard maintenance allowance. It is paid to foster carers whether they take a child or young person on holiday or not. If a child moves prior to, or during the school summer holidays, the holiday allowance will be reclaimed on a pro-rata basis (if it is halfway through the holiday, half the allowance will be reclaimed) unless the foster carers have already taken the child away on holiday. If a child or young person moves into a foster carer’s home during the school summer holidays, the holiday allowance will be paid, again on a pro-rata basis. 

The usual fee and maintenance allowance are paid during holiday periods, and it is expected that both the maintenance allowance and the holiday activities allowance will be used towards the actual costs of caring for the child or young person on holiday. Consequently, the following expenditure can be reclaimed  

• Travel costs - where an individual fare is paid for the child or young person (eg train, coach or air fare), the actual cost, home to destination (return) will normally be reimbursed. Where a child or young person is travelling in a car with the foster carers, their share of the mileage will be paid on a pro-rata basis, eg if there are four other people in the car, one fifth of the mileage will be paid. 
• Accommodation costs - where accommodation does not include any meals, the child or young person’s share of the accommodation will normally be paid, eg if there are four other people sharing a chalet or caravan, one fifth of the rent will be paid. If the child or young person is sharing a hotel room with another child, one half of the room rate will be paid. 
• Meals - the cost of meals should be covered by the maintenance allowance. If meals are included in the cost of the accommodation, the following will be deducted from payment for the accommodation: one tenth if breakfast is provided, two tenths if breakfast and dinner are provided and three tenths if it is full board. For example, if the child or young person is in accommodation that provides bed, breakfast and evening meal and the cost is £300 per week, you will receive eight tenths of that amount, ie £240. 
• Payment will not be made for children 0 to 2 years unless proof of additional cost is provided.
• Holiday insurance - the full cost of holiday insurance for the child or young person will be paid. 

Package holidays (i.e. where both travel and accommodation are included in the price), other than where the foster carer can ascertain from the holiday provider the breakdown of costs between travel and accommodation it will be assumed that one third of the cost is travel and two thirds accommodation.  

Occasionally foster carers take unusually expensive holidays, either because this is part of their lifestyle or because they are attending a special occasion. Agreement must be sought from FBC in advance of any booking. The council will normally make a reasonable contribution towards costs. Young people may get invited to go on holiday with a friend or through a youth group. Such arrangements need to be agreed by their social worker.  

The cost of school trips will be covered by the council if it is in the child or young persons’ best interests to attend. This should be discussed with the school and their social worker and an application for funding should be made to the FBC social worker.  

The City of Edinburgh Council do not support children or young people’s holidays during term time.

Travel allowances

Foster carers cannot claim travel expenses for activities that are part of normal family life such as transporting a child or young person to the local school, or clubs or to go shopping. However, reasonable costs for travel undertaken as part of the fostering role will normally be reimbursed. Approved journeys may include, although are not limited to

• regular or distant hospital appointments,
• visits to prospective foster carers or adopters,
• journeys to a residential school,
• travel to meetings,
• visits to birth family,
• travel to training events,
• transport to a non-local school,
• collecting or dropping off at short break foster carers.

As far as possible, such expenses should be agreed in advance with a FBC social worker who can provide advice on how to claim and relevant forms. These should be submitted electronically where possible. Receipts/tickets will be required. Claims should be made at regular intervals, at least three monthly and before the end of the financial year on 31 March. Claims that are more than six months old cannot be approved. When a private car is used, payments will be at an agreed mileage rate. VAT receipts for petrol must be obtained and attached to the claim form.

Equipment

Once foster carers are approved, FBC has the responsibility to provide essential equipment to them. This will include items, such as, a cot, highchair, car seats, and any required safety equipment. It can also include bed, mattresses, and other basic furnishings. The FBC social worker will talk to the foster carer about any furniture or equipment in the home, which is available for any child or young persons. The FBC social worker will complete the necessary arrangements including the approval and delivery. Equipment will be new. Used equipment is rarely provided, and only under arrangement where it is nearly new, in good condition and with any foster carer’s agreement. All equipment must meet relevant safety standards. Cot mattresses will always be provided new and be replaced once the child has moved. Items can also be replaced because of wear and tear.

If the procurement process for equipment is not followed, then The City of Edinburgh Council cannot guarantee full re-imbursement of sums paid by foster carers. Any purchases foster carers plan to make, or need to make due to an emergency, should be pre-authorised.

Insurance

Foster carers are expected to have adequate home, contents, vehicle, personal injury, and third-party liability insurance. Foster carers should inform their insurance companies that they are fostering. If insurance companies are not given full information, any claim could be discounted on the grounds that they were not completely aware of material facts. If foster carers have any difficulty in obtaining insurance cover, this should be discussed with their FBC social worker. 

Any damages or theft caused by a child or young person should, in the first instance, be claimed through the foster carer’s own insurance company. If the claim is not accepted, there is an excess to pay or the insurance premium is increased because of a claim, this should be discussed with your FBC social worker, who can help you submit a claim to FBC, for example to cover the excess. The City of Edinburgh Council has public liability insurance in place. This covers foster carers for accidental death, injury or illness to any third party or their property as a result of their actions as foster carers as long as these were accidents and not intentional. There are terms and conditions that apply to this insurance.

It is the foster carer’s responsibility to ensure that their car insurance covers any additional liability relating to their role and self-employed status. Foster carers must also ensure that their insurance has a business clause which allows them to transport children and young people in foster care. It is important to consider if any car user in the foster carers household or those registered as babysitters also have adequate business insurance.  Any vehicle used for transporting children or young people must be maintained in a legal and roadworthy condition and used in compliance with statutory regulations.

Foster carers must have their own holiday insurance and insurance for any child or young person, if they take them on holiday. Foster carers should check if the child or young person can be covered by their own holiday insurance or if they need to obtain this through another company. If difficulties are experienced, the Fostering Network may be able to provide advice. 

It is vital that any accident or injury to the child, young person, foster carer, their family, or anyone else, is reported to the FBC social worker and the child’s social worker. They will advise on any actions, forms or reports that should be completed. Any delay may invalidate any insurance claim. 

Individual membership of the Fostering Network is purchased for foster carers. This entitles members to legal advice and representation, if required. Terms and conditions are available from the Fostering Network on 0141 204 1400.

Foster carer holidays

Full time foster carers are entitled to take a paid break from fostering each year, although many choose not to do so.  For every full 28 days per month of care in an eligible placement, carers accrue 1.75 days worth of leave (ie 1.75 days per month x 12 months = 21 days per year).  The maximum annual holiday entitlement is three weeks.  If a foster carer is choosing to use any part of this and alternative temporary care is required for a child or young person, then at least three months’ notice should be given to their FBC social worker. This means an alternative placement can be identified and a child or young person can be prepared for the temporary move. The foster carer fee continues to be paid when they take a break, but the allowances stop as these are paid for the costs of caring for the child or young person.

Foster carers should speak to their FBC social worker if they have relatives or friends willing and able to undertake short break care for the child or young person living with them. A nominated friends and family assessment can be undertaken. This requires satisfactory checks and references, an assessment period, and a carer registration panel. A six-month period is required for completion.

Where foster carers have chosen not to take holiday breaks, or have not taken the full allocated amount, they can accumulate paid breaks to take when a placement ends. This is for a maximum of six weeks, saved across two full calendar years. Carer’s holiday entitlement runs from January to December.

Some foster carers choose not to take a paid break or have not used their full entitlement. For some, an opportunity between placements has not arisen. Foster carers in these situations can advise their FBC social worker that they wish to claim any unused holiday entitlement in payment. This can be done at the end of the full calendar year and payment will be made in the first quarter of the following year.

Regular short breaks agreed within a child or young person’s plan

Regular short breaks are often assessed as a need within a child or young person’s plan. They are part of the supports which are provided when caring for a child or young people who lives with a disability and who is cared for within the specialist disability fostering scheme of care.

Foster Carers who care for a child or young person who is provided with a short break care arrangement will also receive three weeks holiday entitlement. The two arrangements are separate and should not be used alongside or in connection with one another. Short breaks agreed within a child or young person’s plan are to enable a break from caring responsibilities and should not be viewed as an entitlement in the same way as holiday entitlement. Therefore, if a foster carer is using holiday entitlement, the short break usually scheduled for that month will not be accessed. This ensures that disruption in a child or young person’s life is reduced and any separation from their caregiver is limited as holidays cannot be extended using short break stays. No monetary claims can be made for unused short breaks.   

Administration of fees and allowances

All fees are paid in advance. These payments are authorised by a FBC team leader. Allowances are also paid in advance. The child’s social worker authorises allowances by sending a change of circumstances form to the carer payments team. They cannot authorise the start and end of placements, although they will try to sort out payments whenever they can. Payments are made weekly in a foster carer nominated bank account. Foster carers receive their fee and allowance notification letter weekly also. These should be retained by the foster carer for their own records. 

Under or overpayments

Foster carers should inform their FBC social worker if payments appear to be delayed, inaccurate or overpaid. Arrangements can then be made to pay what is due. As foster carers are paid in advance when a placement ends the foster carer has usually been overpaid. Overpayments will be recovered, when possible, from fees or allowances for ongoing or new placements. When this is not possible an overpayment letter will be sent. Repayment by instalments may be negotiated. 

Foster carer, tax, National Insurance Contributions (NIC) and state pension

Foster carers are self-employed, HMRC expect that all income is declared, including all fee payments, allowances, and expenses. For tax purposes, foster carers will have to fill in a self-assessment tax form each year. HM Revenues and Customs (HMRC) provides very helpful information concerning this process. It is important that the tax implications of this are understood, as well as the exemptions and tax relief specific to foster carers.

The Fostering Network provides useful information to foster carers in relation to tax, national insurance contributions and their state pension. This can be accessed via their ‘Income Tax and National Insurance Signpost Booklet’ and covers topics such as

• how the qualifying care relief scheme for income tax works,
• how foster carers should calculate their tax threshold and complete a tax return if they need to,
• how fostering affects National Insurance contributions,
• what happens if a young person stays on after their 18th birthday.

Benefits and children with disabilities

There are a number of benefits designed to assist parents/foster carers in meeting the extra costs involved in caring for a child or young person with a disability. These are based on individual circumstances. The child’s social worker should assist you in applying for relevant benefits. The benefit most likely to be applicable for foster children in your care is disability living allowance (DLA).

Foster carers who make an application for DLA should inform the child or young person’s social worker and FBC social worker. Consideration will be given as to who will be appointee, this ideally can be the foster carer, however in some circumstances can be the council.  

We all have a duty to safeguard children and young people, this extends to financial matters. DLA is the child or young person’s money. It is a financial support for them to support their inclusion. It should not be viewed as a addition to a fostering fee. Practice standards ensure a transparent and accountable approach to supporting children and young people in financial matters. It limits any disputes or discrepancies being raised. 

Foster carers should use separate bank accounts from children and young people. If money is paid to the foster carers account, this should be transferred immediately. For audit purposes transfers should be made electronically. Trust accounts can be set up for children and young people with foster carers as appointees. When the child or young person moves placement, any money, or account, will transfer with them. Records of their accounts will be transferred to their new appointee. Balances should be reviewed quarterly at child planning meetings. Receipts are not required for small expenditures under £50. Those above this should be considered by the appointee and other professionals in the child or young person’s team. Who Cares Scotland can provide advocacy for the child or young person if disputes arise, or agreements cannot be reached.