There is a hug at the end of the novel Matilda that never ends. It is the one Miss Honey gives Matilda when her parents abandon her. “Matilda leapt into Miss Honey’s arms and hugged her, and Miss Honey hugged her back,” Roald Dahl wrote in 1988.
Today, foster carers like Miss Honey are in short supply. Since 2014, the number of children coming into care has risen by 11%. Yet it is estimated that 12% of foster carers left the sector last year, triggering what has been described as a recruitment and retention crisis.
“There is a massive shortage of foster carers,” says Vicki Swain, a spokesperson for the Fostering Network charity, which represents foster carers and services.
She says more than 9,000 new foster carers are required across the UK to make up this shortfall. “We need skilled people who have the patience and ability to completely turn a child’s life around,” she says.
A lack of awareness of how it all works financially – how much you can earn and the costs involved – may be preventing some people from coming forward. In fact, some can earn a lot. Essex county council says: “Some foster carers earn up to £1,000 a week, which is £52,000 a year.”
However, many foster carers do not like to talk about money, the Fostering Network told Guardian Money – and it is fair to say that we struggled to find one who was prepared to speak publicly about their finances.
One anonymous foster carer told Money that if fostering services and local authorities were more upfront about the fees they pay, more people would realise that fostering was something they could afford to do.
So how do you become a foster carer – what does it involve and how much do you get paid? What costs are involved, what are the tax implications, and can you get help with any of the expenses?
Becoming a foster carer
Foster carers do not need to be married, heterosexual or in a relationship, and they do not have to be a homeowner or have children of their own.
You can even have a criminal record, as long as the offences are minor and do not relate to a crime against children or a sexual offence.
You do, however, need to be over 18, live in a home where you can provide a bedroom for each child you foster, and – most significantly – you must be prepared to give up your job and devote yourself to your foster children, if necessary.
“The needs of some children will be so significant that fostering services look for people who don’t work or are able to give up work once they are approved as a foster carer,” Swain says.
You will be quizzed about your views
Before you get approved, you will be asked to participate in a thorough assessment process with a fostering service that typically lasts four to six months.
You will be asked for your views on a range of topics, including parenting, equality, religion, sex and disciplining children, to ensure you are suitable to look after a vulnerable child, and the fostering service may ask to see your bank statements, credit card bills and mortgage or tenancy agreements.
“They will look at whether you’re financially stable,” Swain says. Anyone who is in debt and struggling to make ends meet or in any danger of losing their home would be deemed unsuitable.”
You will then be asked to complete a free training course as part of the assessment process.
The training focuses on the practical skills you will need as a foster carer and examines why vulnerable or traumatised children may exhibit challenging behaviour, and how best to assess and sensitively respond to their needs.
What you will be paid
In the UK, all foster carers are given an allowance to spend on the child. The amount varies according to where you live, the child’s age and whether they have specific needs.
In England, Wales and Northern Ireland, the minimum is usually between £137 and £240 a week, although some local authorities pay less.
In Scotland there is no national minimum allowance, although the Scottish National party pledged in 2007 to introduce one. “Fifteen years on, they still haven’t done it,” Swain says. “That’s a whole generation of children in foster care who have missed out.” Some fostering services in Scotland pay as little as £70 a week, Swain says. Others pay £200.
The Fostering Network says 63% of foster carers also receive a fee, on top of the allowance. While the allowance is spent on the child, the fee payment recognises your time and skills, “because obviously lots of foster carers are told to give up work in order to foster”, Swain says.
The fees can vary: for example, the Essex county council website states that, on average, its foster carers earn £483 a week (£25,116 a year), and earn more for fostering older children and those with complex needs or disabilities. It adds that on top of a fee, you get a weekly allowance of up to £236.95.
In a recent survey by the charity, only 9% of foster carers said they received a fee that was at least equivalent to working 40 hours a week at the “national living wage”.
Meanwhile, a third said their allowances did not meet the full cost of looking after a child. “Many foster carers do spend out of their own pockets to top up things,” Swain says.
Despite this, many say the role is highly rewarding. Fostering, the charity says, has the power not only to transform children’s lives but also the lives of foster carers.
Choosing a fostering service
Although it is often in the best interests of a foster child to remain in their local community, you can foster with any nearby local authority – it does not have to be the one you live in. Alternatively, you can sign up with an independent fostering service, although it is worth bearing in mind that some of these independent organisations make large profits.
In England, Wales and Northern Ireland, you can sign up with only one service – you cannot be approved to foster with multiple services at the same time.
Since the support that different services offer varies, it is a good idea to shop around and interview the fostering service as much as they are interviewing you before you commit to one, Swain says.
For example, ask what the likelihood is that you will always have a placement. This is important because you will receive fees and allowances only when a child is in your care – although in some circumstances, some fostering services will pay a retainer fee when you do not have a child in placement.
It is vital to think ahead and consider how you will support yourself financially when a child is not placed with you.
The nature of foster care means people who do it are altruistic and do not like to talk about money because it is for looking after children, Swain says.
“But getting the right level of financial support is important. You need to be able to meet the needs of the child you’re looking after and, if you’re giving up work in order to foster, you need to pay the bills, too. Nobody fosters for the money but it is really important you get enough support.”
Help with other costs
Some local authorities offer financial or other rewards to their foster carers to encourage more people to take up fostering, such as several weeks of paid holiday each year or expenses for travel related to your role. “There are an increasing number of local authorities that will exempt you from council tax if you’re a foster carer,” Swain says.
You may also be able to get an initial placement grant to help with the initial costs of a child’s wardrobe or be provided with free equipment such as a cot. “Some children come into a foster placement without a possession, without anything in the world,” Swain says.
In addition, you may receive small one-off payments on your foster child’s birthday and at Christmas or other religious holidays,to help cover extra costs.
Often, foster carers receive free or discounted entry to leisure centres and family-friendly events or theme parks.
Tax relief on your fostering income
As a household, you will not have to pay tax on the first £10,000 you receive from fostering. This is in addition to your individual tax-free personal allowance (usually £12,570).
You will also get additional tax relief for every week you foster a child: £200 a week for every child under 11, and £250 a week for older children.
So, for example, if you foster a six-year-old for a whole tax year and a 15-year-old for 10 weeks, you will receive £10,000 of fostering tax relief that year, plus a further £10,400 of additional tax relief for the six-year-old and another £2,500 of tax relief for the 15-year-old, as well as your personal allowance of £12,570.
So, theoretically, you could receive £22,900 from fostering that year and then potentially earn another £12,570 of income on top of that – and not pay any income tax on £35,470 in total.
If you did so, it would be equivalent to earning a gross salary of about £47,000. However, since the amount of tax relief foster carers get is often greater than the allowances foster services pay, it would be wrong to assume you would receive this much money in practice.
When you start fostering, you will need to register as self-employed and file tax returns. This will allow you to claim tax relief.
Entitlement to benefits
Fostered children are not counted as part of your household when any means-tested benefits are calculated, and you will not usually receive child benefit or child tax credit for a foster child.
Equally, the allowances and fees you get from fostering are normally disregarded as income when calculating your eligibility for means-tested benefits. For tax credits purposes, only your taxable profit arising from fostering will be taken into account.
As long as you satisfy the other eligibility rules, you can claim universal credit, for example, and the money you receive from fostering should be ignored when working out how much you can get.
If you are receiving help with housing costs through universal credit, you can include an extra bedroom if you are a foster carer.
One anonymous foster carer talks about money
“Pay is something many people in fostering don’t like talking about. There is a perception that if you are upfront about the allowances that are paid, you may attract people into fostering for the wrong reasons. But I don’t agree with that. I think there are plenty of people who would make terrific foster carers but who aren’t considering it because they don’t think they could afford to do it.
“I would certainly make an educated guess that, for many people, the fees paid would cover one person in their household giving up work to become a full-time foster carer. And this is separate to the money they receive to cover the costs of a child living in their home, such as their food, clothes and energy.
“I don’t think anyone fosters for the money. The money is important because it enables people to foster but it isn’t the reason someone would open their house and their family to looked-after children. But I do think ignorance about the financial arrangements in foster care is a barrier to more people coming forward.
“I think if agencies and authorities were more upfront about the fees they pay, more people would realise that fostering was something they could afford to do.”