As a Foster Carer you may be entitled to various Social Security Benefits including:
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:
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.
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:
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 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:
The person you care for should be in receipt of one of the following:
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:
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:
A foster carer could also claim DLA on a placement’s behalf. The rules in these cases are:
In order to claim Disability Living Allowance, you should visit www.direct.gov.uk or call 08457 123 456.
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:
FosterTalk Limited, Registered Company in England and Wales
10 The Courtyard, Buntsford Gate, Bromsgrove, Worcestershire, B60 3DJ
Registered Company Number: 06318354