- Foster carers are self-employed for tax purposes — significant tax advantages apply
- You are entitled to support from your agency by law
- Universal Credit is available — fostering income does not count as earnings
- You have statutory rights around care plans, complaints, and representation
- If an allegation is made against you, you have clear rights — use them
Many foster carers are unaware of the full range of rights and entitlements available to them. This guide covers the main financial and legal entitlements — from HMRC treatment of fostering income to your rights within the fostering relationship itself.
Tax Status
Foster carers are treated as self-employed by HMRC. Thanks to HMRC's Qualifying Care Relief (QCR), the vast majority of foster carers pay no income tax at all. QCR gives every foster carer a fixed annual relief of £18,140, plus £375/week per child under 11 and £450/week per child aged 11+. See our tax guide for full details.
Universal Credit and Benefits
- You may still qualify for UC even while receiving fostering allowances
- Fostering income does not reduce your UC entitlement in the way employment income would
- You should declare that you are a self-employed foster carer when applying for UC
Your Rights Within the Fostering Relationship
- A written copy of the child's care plan
- Be consulted about changes to the care plan
- A fair investigation if an allegation is made against you
- Representation by the Fostering Network or a legal adviser in regulatory proceedings
- A formal review of any decision to deregister you
Allegations Against Foster Carers
If an allegation is made against you, a LADO (Local Authority Designated Officer) process is initiated. Contact the Fostering Network's advice line (0800 040 7676) immediately. You are entitled to representation and should consider legal advice.
Frequently Asked Questions
Do foster carers get holiday pay?
Not in the traditional employment sense — you are self-employed. However, most agencies continue paying allowances for short breaks and respite periods.
Am I entitled to sick pay as a foster carer?
No statutory sick pay applies to self-employed foster carers. However, if you are unwell, your agency must find an alternative emergency placement.
What if my agency tries to deregister me unfairly?
You have the right to a formal review by your agency's Fostering Panel, and to appeal to the Independent Review Mechanism (IRM) if still dissatisfied. The Fostering Network provides free advocacy for members.