Closed petition Review and increase foster care allowances and tax exemptions
We want the Government to review and increase allowances paid to foster carers, and also tax exemption levels for foster carers, so they reflect the true cost of caring for a child.
FosterTalk's Cost of Living report shows:
- 43% of carers may leave fostering in the next 2 years
- 56% of carers haven’t received an uplift in allowances and those who have, 90% felt it doesn’t cover the cost of caring for a child
- 38% of carers have experienced mental health issues due to the crisis
The number of carers is declining and it’s expected there’ll be a deficit of around 25,000 foster care families by 2026 in England alone. The cost of living crisis is worsening the situation.
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Parliament will debate this petition on 15 January 2024.
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This response was given on 31 March 2023
Allowances are reviewed annually. Minimum rates will rise by 12.43% from April. Tax allowances for foster carers have been reviewed and rise from April, representing an average annual tax cut of £450.
Whilst fostering can be hugely rewarding, we recognise that it takes hard work, skill and dedication. Foster families deserve to be valued and respected for what they do every day for our most vulnerable children. Allowances and tax arrangements for foster carers have both recently been reviewed and increased.
The Fostering Services: National Minimum Standards (https://www.gov.uk/government/publications/fostering-services-national-minimum-standards), issued by the Secretary of State under the Care Standards Act 2000, set out the expectations that are placed on foster parents and their fostering service providers. This includes the expectation that foster parents should not be financially disadvantaged because of their fostering role. We expect all foster parents to receive at least the weekly National Minimum Allowance (NMA), in addition to any agreed expenses to cover the full cost of caring for each child placed with them (standard 28).
The NMA is routinely uplifted each year. From April 2023, the minimum rate of allowance will increase by 12.43%. This represents an increase of between £17 and £30 in allowances per week, resulting in foster carers receiving £154 - £270 per week depending on the age of the children they foster and their location. This above-inflation increase to the minimum level at which foster carers should be paid will help foster parents cover the increasing costs of caring for a child in their home.
Qualifying Care Relief (QCR) is a tax relief available to support foster carers, in addition to some other carers. It ensures a carer’s income is not taxed unless it exceeds an overall QCR allowance.
As part of the budget, the Chancellor announced that the QCR threshold, a form of tax relief for foster carers and shared lives carers, would be nearly doubled to £18,140. In addition, to maintain the value of the relief in real terms, starting in 2024/25, HMRC will be increasing these rates in line with CPI inflation. This increase will ensure that the vast majority of foster carers are taken out of tax on their care income. These changes represent an average tax cut of £450 per year for foster carers, as well as simplifying the process for self-assessment returns for most foster carers. Further information on changes to QCR can be found here: https://www.gov.uk/government/publications/increase-in-qualifying-care-relief/qualifying-care-relief-increase
Alongside these changes, we are investing over £27 million this Spending Review to deliver a fostering recruitment and retention programme so foster care is available for more children who need it. This will boost approvals of foster carers in areas of specific shortage, and test and develop a best practice regional model that can then be rolled out. We will also establish a network of expertise and support for all local authorities.
Department for Education