BECOMING A CARER
Will my government benefits be affected by fostering payments?
One of the most common questions we hear from people thinking about becoming foster carers is:
“If I start fostering, will I lose my benefits?”
It’s an understandable concern. Many people rely on certain benefits for financial stability, and the last thing you want is to make a life-changing decision without knowing how it will affect your income.
The good news? In most cases, fostering payments won’t reduce or stop your benefits.
Got Questions?
If you want to know more about becoming a foster carer in London, ask our team here
When you foster with Lika Family Fostering in London, you receive a weekly fostering allowance every Friday while a young person is in your care.
This allowance is designed to cover all the day-to-day costs of looking after them—food, clothing, school trips, transport, pocket money, and more.
You’ll also receive a weekly reward payment for your time, skills, and commitment to making a difference.
At Lika, our carers are paid £530 – £620 per week, made up of:
- Allowance element> (not taxed) – £270 per week to cover the young person’s needs.
- Reward element (taxed) – £260–£350 per week as your thank-you payment.
These two amounts are paid together each week you care for a young person.
Importantly, fostering payments are not classed as a wage or salary. You’ll be self-employed for tax purposes and benefit from Qualifying Care Relief, a special tax scheme for foster carers.
As of 2025, foster carers receive £19,360 in tax relief per household per year. Most carers pay little or no tax, as only the reward element – not the full weekly amount – is taxable. Please check the latest relief amounts as these can change
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Fostering payments can be ignored or disregarded when calculating means-tested benefits.
The Department for Work and Pensions (DWP) recognises that fostering is different from regular employment, it’s a vital public service you provide.
When your benefits are calculated, fostering income simply usually isn’t counted.
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Here’s how the most common benefits work alongside fostering payments:
- Universal Credit – Fostering payments are ignored when your entitlement is calculated. You can still claim UC for yourself and your family (but not for the foster child).
- Jobseeker’s Allowance (JSA) – Payments for fostering are disregarded, so your JSA amount stays the same.
- Housing Benefit – Fostering payments are not included in the income calculation. Your foster child won’t be counted in your household size for housing benefit purposes.
- Council Tax Reduction – Your fostering allowance is disregarded in the income assessment.
- Child Benefit – You cannot claim for a foster child, but your own children’s entitlement remains unaffected.
- Tax Credits – If you’re still on the old system, fostering payments aren’t counted as income.
- Disability Living Allowance (DLA) & Personal Independence Payment (PIP) – If your foster child has a disability, you may be able to claim DLA (under 16s) or PIP (16+) through your local authority. These are paid directly to you as the carer or “appointee” if the child needs more care than others their age or has mobility difficulties.
1. You can’t claim benefits for the foster child
Because you receive a fostering allowance, you won’t get Child Benefit, Child Tax Credit, or the child element of Universal Credit for them.
2. Your own household still counts
You can still claim benefits for yourself and your own children as normal.
3. Special tax rules make it easier
As a foster carer, you’ll be registered as self-employed and complete a tax return each year. Qualifying Care Relief means most carers pay little or no tax or National Insurance on fostering income.
4. Always inform the benefits office
Even though fostering payments are disregarded, let your local benefits office or the DWP know when you start fostering. This avoids delays or misunderstandings later.
Let’s say you receive Universal Credit for yourself and two children. You start fostering a teenager and Lika pays you £555 per week.
When the DWP works out your UC, they ignore that £555 completely. Your UC stays the same, except you won’t get the child element for the foster child. You’ll use the fostering allowance to meet their needs.
For many prospective foster carers, knowing their benefits won’t be affected removes a huge worry.
Fostering is a big commitment—emotionally, practically, and financially. You need to feel confident you can manage your household budget while giving a young person the love, stability, and opportunities they deserve.
If you rely on benefits, fostering can still be the right choice. The financial support is designed to work alongside your benefits, not replace them.
Everyone’s circumstances are unique, so it’s worth checking with your benefits office or an independent welfare adviser before you start.
You can also use the government’s benefits calculator to check your situation.
Lika is a therapeutic fostering agency, rated Outstanding by Ofsted. Every decision we take is based on Systemic Family Therapy principles. That means relationships, openness and honesty are at the heart of everything we do. All Lika foster carers receive extensive training in Systemic Family Therapy principles and therapeutic parenting techniques.
It’s similar to the training a newly qualified social worker receives (although not quite as technical) — so you’ll be fully prepared for your first placement and be viewed as a professional foster carer in your own right.
Being a Lika foster carer means always receiving specialised and consistent support from our expert team of professionals.
Your support will include:
- 1 to 4 weekly supervisions with your supervising social worker to talk through and understand the needs of your young person
- 24/7 out-of-hours access to one of the Lika team, so you’re never unsupported if things feel difficult
- Access to Lika’s team of skilled and knowledgeable Systemic Psychotherapist Consultants and Systemic Social Work Practitioners, who are never stuck for ideas on how to support
- Virtual monthly foster carers support meeting, led and chaired by experienced foster carers
- Virtual fortnightly Therapeutic Family Consultations, facilitated by one of our psychotherapists and open to all our agency’s foster carers
- Membership to the National Association of Therapeutic Parents and The Fostering Network
- Life coaching for foster children, birth children and foster carers
- Our Mentor Support Scheme, which partners new foster carers with more experienced foster carers
- Free training for fostering support networks. (Your family and friends are welcome to join any of the training Lika offers.)
- Access to Lika’s support workers, depending on the level of need for the young person
- Access to Lika’s Educational Consultant, who can offer ideas and advocacy in supporting young people to achieve in education
- Help from Lika’s Systemic Social Work Practitioners/Therapists, who can undertake skilled direct work without waiting lists for the Child and Adolescent Mental Health Service (CAMHS)
- 14 to 21 days of paid respite (depending on complexity) to recharge your batteries and have some space for self-care.
If you’re in south or east London and you’re interested in becoming a foster carer, give the helpful team at Lika a call on 020 3370 0987. We’re here to answer all your questions.
We’re currently in: Barking and Dagenham, Barnet, Brent, Bexley, Bromley, Camden, City of London, Croydon, Greenwich, Hackney, Hammersmith and Fulham, Ealing, Haringey, Islington, Kensington and Chelsea, Lambeth, Lewisham, Merton, Newham, Redbridge, Southwark, Sutton, Tower Hamlets, Wandsworth, Westminster, Enfield, Harrow, Havering, Hillingdon, Kingston upon Thames, Richmond upon Thames, Waltham Forest, Harrow and Essex.
