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Social Security Benefits

As a Foster Carer you may be entitled to various Social Security Benefits including:

  • Tax Credits
  • Income Support
  • Housing Benefit
  • Council Tax Benefit
  • Carers Allowance
  • Disability Living Allowance

Tax Credits

Tax credits are payments from the government. If you are responsible for at least one child or young person, you may qualify for Child Tax Credit. If you work, but are on a low income, you may also qualify. You can often get both types of tax credits. They are not taxable.

Working Tax Credit (WTC)

Working Tax Credit is based on the hours you work and get paid for, or expect to be paid for. You can claim whether you are an employee or a self-employed person. Unpaid work does not count for Working Tax Credit.

Child Tax Credit (CTC)

Child Tax Credit is paid to you if you are responsible for at least one child or young person who normally lives with you. You do not have to be working to claim Child Tax Credit

How much do you get?

The amount of tax credits you get depends on things like:

  • How many children* you have living with you
  • If you live with someone as a couple
  • Whether you work - and how many hours you work
  • If you pay for childcare*
  • If you or any child* living with you has a disability

Your payments also depend on your income. The lower your income, the more tax credits you can get.

*Birth children only

Foster Carers and Tax Credits

When applying for WTC or CTC you will need to disclose your Self-Employment profit.  This will be the fostering income in excess of your Qualifying Care Relief (QCR). If your fostering income is less than your QCR then you will have a £0 taxable income, and this is the figure you disclose.

Income Support

Foster carers are in the unique position of being able to choose whether to be deemed as being working and claim Working Tax Credits or not working and claim Income Support. Income Support is a non-taxable benefit which for people who work less than 16 hours per week but who do not need to sign on as unemployed, such as lone parents or foster carers.

Unless a carer has a second job, they will not be deemed as working more than 16 hours per week and will therefore meet this condition.  Please note that fostering income does not count as remunerative work for Income Support purposes.

There are certain restrictions when claiming Income Support:

  • As it is a means tested benefit, if you have savings of more than £16,000 you will not qualify
  • If you work more than 16 hours per week (in a second employment), then your benefit may be reduced
  • If you are married, in a civil partnership or if you live with a partner, you must make a joint claim rather than as an individual.  Therefore, if your partner works full time you may not qualify
  • As a foster carer, you will not be able to claim Income Support for periods between placements.  In these periods, you would need to claim income-based Jobseeker’s Allowance. (Please note that if in these periods you receive a retainer then this may be treated as earnings and may reduce your entitlement to income-based JSA.)

It is also worth noting that if you live in mortgaged property, mortgage lenders will look less favourably on Income Support than they will on Working Tax Credits.  In fact, lenders will view Working Tax Credits as part of your income towards a mortgage claim whilst they will not take this same view for Income Support.

Therefore if you have a mortgaged property, or if you are looking to move to mortgaged property in the near future, it may be worth considering claiming Working Tax Credits rather than Income Support.

Housing & Council Tax Benefit

Housing benefit and Council Tax Benefit are both means-tested, and generally have the same conditions to qualify.

Housing benefit is for people who rent their home.  You must have a low income and savings of not more than £16,000 to qualify.  This benefit is paid irrespective of whether you are actively seeking work or not, and may be paid in addition to other benefits.

Any fostering allowances should be completely ignored when claiming – including any ‘reward’ element.  Any retainer that you receive as a foster carer should also be ignored to the extent that it is offset by any reasonable expenses including Income Tax and NICs.

If you or your partner qualifies for Income Support, income-based JSA or income-related E&SA, then you will automatically qualify for housing benefit, usually at the full rate.

It may also be possible that you qualify for Council Tax Benefit.  The amount of this will depend on how much your Council Tax bill is who you live with.  Once again, people with savings exceeding £16,000 will not qualify.

If you are fostering a disabled child, then you may qualify for a Disability Reduction in your Council Tax bill.  Please see page 45 for more details. In order to claim these benefits, you should contact your local council directly.

Carers Allowance

Carers allowance is a taxable benefit and would therefore have to be included on your tax return as taxable income. It’s intended to help people who look after others who are disabled, and fostering income is disregarded when calculating a person’s eligibility. 

In order to qualify for Carers Allowance you will need to:

  • Be aged 16 or over
  • Spend at least 35 hours a week caring for a person
  • Earn less than £100 per week after certain deductions have been made e.g. income tax.

The person you care for should be in receipt of one of the following:

  • Attendance Allowance
  • Disability Living Allowance (at the highest rate for personal care)
  • Constant Attendance Allowance at the normal maximum are with an Industrial Injuries Disablement Benefit
  • Constant Attendance Allowance at the basic (full day) with a War Disablement Pension.

Other restrictions:

  • You cannot be in full time education with 21 hours a week or more of supervised study – or doing a course described as full time by the college or establishment
  • Carers Allowance can only be paid for caring for one person.
  • Carers Allowance can be claimed by more than one person in a house (for example a couple caring for each other).
  • Carers Allowance is not affected by other benefits that you may have.

The weekly rate that you will receive is £55.55 (2012-13).  In some cases you may meet the conditions to be eligible for both Carers Allowance and other benefits such as State Retirement Pension, Contributory Employment and Support Allowance or the ‘Guarantee Credit’ element of Pension Credit.

Since these benefits ‘overlap’, your Carers Allowance may be reduced or you may not receive a payment even though you would be entitled if it weren’t for the other benefits you receive.The rules can get very complicated and you need to get further advice from an expert benefits advisor.

 

If in doubt, you should always make a claim for Carers Allowance as this might also allow you to claim an extra amount, known as ‘Carers Premium’ as part of other benefits, for example:

  • Income Support
  • Income-Based Jobseeker’s Allowance
  • Housing Benefit
  • Council Tax Benefit

In order to claim Carers Allowance, you should visit www.direct.gov.uk or contact 0845 608 4321.

Please note that in accordance with Fostering Regulations 2011, then you will be paid in accordance with Children’s Act 1989 Section 22(c).  This sets out that you are paid via your Local Authority and are therefore entitled for your income from fostering to be disregarded for Carers Allowance purposes.

Disability Living Allowance

Disability Living Allowance (DLA) is a tax-free, non-means tested benefit to assist people who have a recognised disability. This means that it does not need to be shown on your tax return. The person claiming will have to have been declared as having a disability by a medical practitioner. The benefit is to support people with disabilities with the additional costs that are associated with their disability.

If a carer is disabled they will be entitled to DLA in their own right.  The rules in these cases are:

  • This should be claimed before you reach 65 years old
  • If you are over 65, Attendance Allowance should be claimed instead
  • Your disability must result in you requiring personal care or supervision, or in you experiencing difficulty in walking and getting around
  • The amount of benefit that you would receive would depend on the degree of care you require

A foster carer could also claim DLA on a placement’s behalf. The rules in these cases are:

  • The DLA would strictly belong to the placement
  • However, the allowance is likely to be paid directly to the foster carer
  • The carer would then have an obligation to use the DLA only to pay for things which are related to the child’s additional needs
  • This money is not classed as taxable, and would not need to be shown on the carer’s tax return

In order to claim Disability Living Allowance, you should visit www.direct.gov.uk or call 08457 123 456.

Benefits Calculator

Turn2us is a charity run organisation that provides free help and advice regarding social security benefits. Visit their benefits calculator to find which benefits are worth looking into.  Please note that it will not be a comprehensive calculation.  You may need to contact us for further guidance when applying for various benefits, as it is a general guide that available for everyone.

You will need:

  • Details of all your income, e.g. State Retirement Pension, occupational pensions, Disability Living Allowance, Attendance Allowance, other state benefits and any earnings
  • If you are married, in a civil partnership or living with someone as a couple, you will need details of your partner’s income, including any benefits they are getting? We need to know this as you will be assessed as a couple. If you have anyone else living with you who is not your partner, we need to know about them too – see below
  • Details of how much money you have in savings, investments and other capital
  • How much your annual council tax bill is and whether you get any help with it
  • Details of your rent or mortgage payments
  • Information about anyone else, e.g. grown-up children, living with you Are they in employment or on benefits? What is their income?
  • Details of anyone who receives carers’ allowance for looking after you or anyone else in your household

FosterTalk Limited, Registered Company in England and Wales
10 The Courtyard, Buntsford Gate, Bromsgrove, Worcestershire, B60 3DJ
Registered Company Number: 06318354