Tax and national insurance
Most foster carers do not pay tax on their fostering income due to the Qualifying Care Relief scheme.
Foster carers are self-employed and have to submit a tax return at the end of the financial year. We provide you with an end of year income statement. This can be done through the online Self Assessment tax return at no cost.
Foster carers qualify for Class 2 National Insurance Contributions at £2.95 per week. This provides access to state maternity benefits, a state retirement pension and state bereavement benefits.
Foster carers can apply for Class 3 National Insurance credits at the end of the tax year. This counts towards state retirement pension only.
Foster Carers may qualify for Working Tax Credits depending on their income, and fostering income is disregarded when claiming some benefits.
HM Revenue and Customs offer an e-learning course on tax and National Insurance for foster carers: