Tax, benefits, and insurance

Tax arrangements

You should register as self-employed as soon as you have been approved as a foster carer.

When you file your tax return, you will be able to claim:

• A tax exemption of up to £10,000 per household
• Tax relief for every week you foster a child

Read more about tax for foster carers on GOV.UK

Claiming benefits

Being a foster carer can affect which benefits you can claim. If you're claiming benefits, you should:

• Tell the organisation that pays your benefits that you are also getting fees and allowances for fostering, and
• Use a benefits calculator to check what benefits you're entitled to

Children with disabilities

Children with disabilities or a long-term health condition may be entitled to Disability Living Allowance (DLA), Employment and Support Allowance (ESA), or Personal Independence Payment (PIP).

If your foster child gets DLA or PIP, you may be able to claim Carer's Allowance.

If your foster child gets DLA, you must:

• Follow the guidance on using DLA as a foster carer (Word doc) [34KB], and
• Record what the DLA is spent on using a DLA expenditure recording form (Word doc) [31KB]

Insurance

You must have a fully comprehensive home contents insurance policy. If you are an owner occupier, you must have building insurance as well. The Fostering Network provide advice about home insurance for foster carers.

You are responsible for telling your insurance company that you're fostering for the local authority. When items are damaged, you should follow the guidance on insurance for foster carers (PDF) [174KB].

If you are going to use your car to transport foster children, you must have fully comprehensive car insurance.