To foster a child is different than to adopt a child; the child will stay with the foster family for a duration of time as required, and while the foster family may be responsible for the childâ€™s well-being while they are within their home, the legal rights of the child are still with the birth parents. There will often be a plan for the childâ€™s future and for the child to return to its birth family but sometimes fostering can lead to adoption.
There are several different types of foster care:
â€¢ Emergency â€“ a child will need care for a few nights.
â€¢ Short-Term â€“ The care for a child will be a few weeks or a few months.
â€¢ Short Breaks â€“ A short time; a few nights or a few weeks, to give the family or carers of the child a break, particularly if the child has behavioural difficulties or special needs.
â€¢ Remand â€“ by court order to be with a specifically trained foster family.
â€¢ Long-Term â€“ Foster care to be provided for a few years. This is common with children who do not want to be adopted.
â€¢ Family/Friends/Kinship â€“ In these cases, the child will be fostered by someone that they know.A foster carer will be classed as a self-employed person which means a foster carer can make national insurance payments towards the state pension. The allowance income received from the foster care agency will need to be declared on a self-assessment tax return. The foster care agency will pay either a week or monthly payment to the foster carer to contribute to the care of the fostered child. England, Wales and Northern Ireland all have a minimum weekly allowance to be paid to them for each child. Scotland currently does not have a minimum allowance. The minimum allowances for England outside of London are as follows:
â€¢ Baby - Â£129 per week
â€¢ Pre-primary - Â£132 per week
â€¢ Primary - Â£146 per week
â€¢ 11-15 year old - Â£167 per week
â€¢ 16 â€“ 17 year old - Â£194 per week
The fostering agency may choose to make additional payments for summer holidays, Christmas and birthdays.
The foster carer will be tax exempt on Â£10,000 of the allowance payments, and a further amount for each week they care for a child. If the child is under 11, they will have Â£200 per week of caring for the child free from tax, and this rises to Â£250 if the child is over 11. If there are multiple children in the fostererâ€™s care, they can apply the weekly exemption for each child. Example:
12 year old, cared for 4 weeks: Â£250 x 4 = Â£1,000
9 year old, cared for 48 weeks: Â£200 x 48 = Â£9,600
Â£10,000 + Â£1,000 + Â£9,600 = Â£20,600 amount of weekly allowances free from tax. This amount can be added to the self-assessment tax return as an expense which will then show the remainder of the allowances on which tax is due.Tags:
personal tax, self assessment tax return, foster care, tax