A Guide to Benefits for Foster Carers

• Types of benefits
• How fostering affects benefits
• Universal Credit
• Jobseekers’ Allowance (JSA)
• Employment and Support Allowance (ESA)
• Housing Benefit
• Pension Credit
• Child Benefit or Scottish Child Payment
• Benefits for children or young people in your care
• Carer’s Allowance or Carer Support Payment
• Benefit cap
• Other care arrangements
• Other payments, funding and related financial matters
• Additional support

Benefits can be divided into one of three categories:

Contribution-based benefits, for people who have made enough National Insurance contributions. These benefits include:

• Jobseekers’ Allowance (JSA) (sometimes called New Style JSA)
• Employment and Support Allowance (ESA) (sometimes called New Style ESA)
• State Pension

Means-tested benefits, which depend on your income and savings (and those of your partner, if you have one). These benefits include:

• Universal Credit
• Pension Credit
• Housing Benefit
• Council Tax Support

Non-means-tested or non-contribution-based benefits, which depend on a test of circumstances. These benefits include:

• Disability Living Allowance or Personal Independence Payment
• Attendance Allowance
• Carer’s Allowance or Carer Support Payment (Scotland)
• Child Benefit (foster carers are not entitled to Child Benefit for fostered children).

This means that your individual circumstances (including where you live, who you live with, your income and employment status) will determine the benefits you may be eligible for. Your role as a foster carer is just one component of these circumstances.

Generally, fostering shouldn’t affect your benefits entitlement, or any benefits you already receive.

• Fostering income is disregarded (ignored) when calculating all means-tested benefits.

Example: If you are a carer and you start fostering a child, your fostering allowance will not be counted as income when calculating your entitlement to Carer’s Allowance or Carer Support Payment (Scotland). This means it should have no impact on your benefit payments.

Benefits including Disability Living Allowance (DLA), Personal Independence Payment (PIP), Adult Disability Payment Scotland, Attendance Allowance or Pension Age Disability Payment (Scotland) will be also unaffected by fostering.

Note: Although fostering payments should be ignored in benefits calculations, we recommend that you declare your fostering income, either on your claim form or on your online journal once your claim is made, with a note stating that it should be fully disregarded. Otherwise, there is a risk of DWP presuming your regular income from fostering is undeclared wages.

• There are some payments related to fostering that may be seen as ordinary earnings (for example, if you are paid to deliver training to other foster carers). In this case, seek advice from a qualified benefits specialist.
• Fostering is not treated as work, so it may be worth exploring your entitlement to benefits such as Jobseekers' Allowance or Universal Credit.

Universal Credit is a means-tested benefit for people of working age to help with living costs, housing costs, childcare costs (for dependent children) and other needs.

You may claim Universal Credit if you:

• are aged 18 or over (with some exceptions)
• are under pension age
• are not in full-time education
• live in the UK
• accept a claimant commitment (an agreement to seek work, but which has special rules for foster carers.

You may be able to claim Universal Credit if you are fostering because:

• Fostering is not treated as work or self-employment, but as providing a service.
• All fostering payments are disregarded as income when calculating Universal Credit.

This means you may be entitled to more than you expect.

Universal Credit is based on the difference between the amount of money your household is entitled to (based on your circumstances) and the amount of other income you have. Savings over £16,000 exclude you from Universal Credit, and savings above £6,000 reduce the amount you can get. All fostering payments are disregarded as income when calculating Universal Credit.

How is Universal Credit calculated?

Universal Credit is made up of a ‘basic allowance’ plus additional means-tested elements, all of which depend on your individual circumstances. These are:

• child element (for your own dependent children, not fostered children)
• childcare costs element (as above)
• limited capability for work and work-related activity elements
• carer's element
• housing costs element (including an extra bedroom for fostering).

Claimant commitment

Anyone who receives Universal Credit must agree to a claimant commitment, which lists your ‘work-related requirements’ – i.e., the activities you must do to keep receiving Universal Credit. These activities will depend on your individual circumstances.

• Foster carer couples must nominate a ‘lead carer’, who will generally only be required to attend work-focussed interviews at the Job Centre (until the child is 16, sometimes 18 in exceptional circumstances).
• The other non-lead foster carer has all the work-related requirements that apply in their circumstances (i.e., they will be expected to look for work if unemployed or prove that they are unfit for work due to ill-health or other caring responsibilities).
• Single foster carers:

- with a child under one have no work-related requirements

- with a child aged one to 15 will be required to attend work-focussed interviews

- with a child aged 16 or over will be expected to look for or be available for work in most circumstances.

If you are a ‘lead’ or single foster carer and you intend to continue fostering, you are allowed an unbroken period of eight weeks without a child in your care before full work search and availability requirements are applied.

Jobseekers’ Allowance (JSA) is a benefit for people who are not in full-time employment but are capable of work and are looking for work. If you already receive JSA because you are unemployed, you can keep getting it while you are fostering if you can show:

• you are available for work
• you are looking for work
• fostering will not affect your ability to work (e.g., because you have arranged childcare).

If you do not already receive JSA, you are most likely to be eligible if you are:

• a single carer looking after children aged 16 or over
• a foster carer with a gap of more than eight weeks between children staying with you
• the ‘non-lead’ carer in a fostering couple

If JSA is not enough to live on, or if you are not eligible, you may receive Universal Credit.

Employment and Support Allowance (ESA) is a benefit for people who have limited capability for work because of sickness or disability, but do not receive Statutory Sick Pay.

As fostering is not considered work, it does not prevent you making an ESA claim. But ESA is only paid for 12 months, after which time you may have to claim Universal Credit.

If you receive any financial support with your housing, including Housing Benefit, you can carry on getting it as a foster carer. Your fostering income will be disregarded when calculating how much housing support you can get.

Note: For most working-age claimants, Housing Benefit has been replaced by the Housing Cost Element of Universal Credit. For those of pension age, Housing Benefit has been replaced by the Housing Cost Element of Pension Credit.

Under-occupancy rule (‘bedroom tax’)

• You are allowed one extra bedroom for fostering, even if you do not currently have a child living with you.
• Any additional bedrooms used for fostering will be treated as ‘spare’ bedrooms (even if you have a fostered child using them).

Example: A household with a couple and two foster children will only be allowed payment for a two-bedroom property (one bedroom for the couple and a spare bedroom for fostering).

Discretionary Housing Payment (DHP)

If your Housing Benefit or Universal Credit is reduced due to under-occupancy, you can apply to your Housing Benefit department for a Discretionary Housing Payment (DHP). These payments are discretionary, so each local authority or trust decides how to treat applications.

Pension Credit is a benefit that ‘tops up’ your state pension and other income to a minimum level. If you are over the age of 66, you may be entitled to Pension Credit.

• Your fostering income will be disregarded (ignored) when calculating how much Pension Credit you can get.
• You won’t be able to get any extra money for children you are fostering.

If you are in a couple and one of you is below pension age, you may have to claim Universal Credit instead. If you are a mixed age couple and you start fostering, it is advisable that the younger person is the ‘lead carer’ for Universal Credit purposes, so they are not required to look for work (the older partner is already exempt).

Foster carers are not entitled to claim Child Benefit or Scottish Child Payment for fostered children. 
Benefits for children and young people in your care
You cannot claim benefits for children you foster because they are not counted as part of your household. But if you are looking after a child or young person with a disability, they may be eligible to claim financial support to help you meet their needs.

Disability Living Allowance (DLA) - in England, Wales and Northern Ireland

Disability Living Allowance (DLA) is a benefit for people aged under 16 who have difficulties with mobility, or who need more looking after than a child of the same age without a disability. It is made up of two components.

• A care component, for children who need extra support (compared to another child of the same age).
• A mobility component, for children who need guidance or supervision from someone else to walk outdoors or travel an unfamiliar route.

Talk to the child’s social worker about:

• making a new DLA claim for a child in your care, or
• whether you should become the ‘appointee’ for a child’s existing claim (the person with the responsibility for deciding how the payment is spent).

Foster carers are usually the most appropriate ‘appointees’. 

Child Disability Payment – Scotland

In Scotland, a Child Disability Payment provides money to help meet the additional care and mobility needs of children with a disability, up to the age of 18. 
Talk to the child’s social worker about:

• making a new Child Disability Payment claim for a child in your care, or 
• whether you should become the ‘appointee’ for a child’s existing claim (the person with the responsibility for deciding how the payment is spent).

Foster carers are usually the most appropriate ‘appointees’, though young people can manage their own payments from the age of 16.

Personal Independence Payment (PIP) (in England, Wales and Northern Ireland) and Adult Disability Payment (Scotland)

In England, Wales and Northern Ireland, Personal Independence Payment (PIP) is a benefit for people aged 16 to pension age, to help with some of the extra costs caused by long-term ill-health or disability.

In Scotland, the equivalent benefit is called Adult Disability Payment and is a benefit for people aged 18 and over (although young people in receipt of Child Disability Payment can apply earlier). These benefits are made up of two components:

• A daily living component, paid if someone needs help with things like washing, dressing, communicating, preparing food or managing medicines.
• A mobility component, paid if someone needs help going out or moving around due to physical or mental health difficulties, or additional learning needs.

If you are caring for a child aged 16 – 18 and they require an ‘appointee’ for their PIP or Adult Disability Payment (someone with responsibility for deciding how the payment is spent), you are usually the most appropriate person.

The benefit cap is a limit on the total amount of benefit you can get. There is currently a benefit cap in England, Scotland and Wales and the limits vary depending on where you live.

Foster carers are generally not affected by the benefit cap as fostering income isn’t included in income calculations for means-tested benefits, and there are no benefits payable in relation to fostered children (except disability benefits which are already excluded from the benefits cap).

The rules around benefits for carers in other care arrangements (i.e., those not fostering through a local authority, trust or independent fostering provider) are complicated. Always seek specialist benefits advice tailored to your individual circumstances.

Private fostering

A child you foster in a private fostering arrangement is treated as part of your household.

• You can claim benefits including Child Benefit or Scottish Child Payment and Universal Credit on the same basis as any other parent.
• The child will be seen as a family member for existing or future benefits claims (e.g., they will be classed as a dependent for Housing Benefit).
• Any money you receive from the child’s family will be disregarded as income for all means-tested benefits, viewed as the equivalent of child support.

Kinship care/family and friends care

In these arrangements, the benefits rules depend on the legal status of the child.  If a child lives with you but is not formally ‘looked after’:

• The child is viewed as a part of your household, so you can claim benefits including Child Benefit or Scottish Child Payment and Universal Credit on the same basis as any other parent.
• The child will be seen as a family member for existing or future benefits claims (e.g., they will be classed as a dependent for Housing Benefit).

If a child is legally ‘looked after’, the normal rules about fostering and benefits will apply (i.e., you cannot claim Child Benefit or Scottish Child Payment for the child).

Supported lodgings

• Any income you receive as rent is disregarded for the purposes of calculating Universal Credit or Pension Credit but will be counted in part against your Housing Benefit if you are of pension age.
• Any payments you receive for supporting the young person may be treated as earnings from self-employment if you are providing supported lodgings as a business.
• We strongly advise seeking advice from a specialist benefits adviser.

Child Arrangements Orders (CAOs) and Special Guardianship Orders (SGOs)

A child living with you under a Child Arrangements Order or Special Guardianship Order is treated as part of your household.

• You can claim benefits including Child Benefit or Scottish Child Payment and Universal Credit on the same basis as any other parent.
• You can include the child on Housing Benefit, Council Tax Support and Pension Credit claims, because they are treated as dependents.
• Child Arrangement Order allowances and financial support payments to Special Guardians are disregarded as income when calculating your entitlement to all means-tested benefits. (The local authority may consider your income from benefits when calculating the level of financial support they will provide.)

If you have previously been fostering a child who now lives with you under one of these Orders, and claiming benefits as part of that arrangement (for example, claiming Universal Credit as a foster carer with no other employment), you will now need to adjust your claim to reflect your new circumstances (for example, claiming Universal Credit as someone who is looking for work).

Staying Put, Continuing Care, When I Am Ready and Going the Extra Mile (GEM)

Former foster carers who continue to provide a home for a young person over the age of 18 are not seen as acting in the place of parents.

• The young person is eligible to claim Universal Credit for themselves (including the Housing Costs Element if they are paying rent). Their claim will have no impact on your benefits.
• Any payments made to you for your care are disregarded as income when calculating your entitlement to means-tested benefits, including Universal Credit.
• Any payments made to you by the young person (i.e., in the form of rent) are also disregarded as income if you receive Universal Credit or Pension Credit. However, these payments will be partially considered as income when calculating your Housing Benefit or Council Tax Support if you are over pensionable age.

Parent and child arrangements

If either the parent, the child, or both are legally considered ‘looked after’, the effect on your benefits is no different from any other fostering arrangement – i.e., any payments you receive for your fostering are fully disregarded as income for the purpose of benefits calculations.
If you are fostering a young parent who has a child of their own living with them:

• The parent can claim Child Benefit for their child, irrespective of the parent or child’s legal status.
• If the young parent is 16 or over and has the child living with them, they can claim Universal Credit in their own right, whether they are in education or not, and whether they and/or the baby are legally ‘looked after’. A parent is entitled to the ‘child element’ of Universal Credit if the child is normally living with them, even if the child is looked after.
• Payments made to you as a foster carer are only relevant if you are making a Universal Credit claim, where they are disregarded.

Access to free childcare (England)

If you care for a child aged 9 months to 4 years, and live in England, you can claim 30 hours per week of free childcare for 38 weeks of the year, if:

• you are in paid work outside your fostering role and
• you earn less than £100,000.

Speak to your social worker and your local authority if you want to apply, and keep in mind that any childcare arrangements must be consistent with the child’s care plan.

Child Winter Heating Payment (Scotland)

Child Winter Heating Payment is a benefit from the Scottish Government to help children and young people with disabilities, and their families, with increased heating costs over winter. Children and young people in Scotland will get the payment automatically if they are aged under 19 and receive one of:

• the highest rate of the care component of Child Disability Payment
• the highest rate of the care component of Disability Living Allowance for children
• the enhanced daily living component of Personal Independence Payment
• the enhanced rate of the daily living component of Adult Disability Payment
  Disabled Facilities Grant (DFG)
  The Disabled Facilities Grant (DFG) is a means-tested grant in England, Wales and Northern Ireland for making changes to your home to meet the needs of people with disabilities.

To be eligible, you or the person you are claiming for must intend to live in the property for the duration of the grant (currently five years).

You can apply for a DFG on behalf of a child in your care, but the provision may depend on the type and length of your fostering agreement.

There is currently no DFG in Scotland, but there is help with adaptations (gov.scot - external site).

Free school meals

• In England, all children in reception, year one or year two of a government-funded school can get free school meals. An older child in your care may get free school meals if you receive certain benefits (including Universal Credit if your household income is less than £7,400 per year after tax (not including any benefits)). From September 2026, all households receiving Universal Credit will be entitled to free school meals for their children, regardless of income.
• All children in Scotland in primary one to five, at schools run by their local council or funded by the Scottish Government, can get free school meals during term time. In addition, families who receive certain benefits (including Universal Credit if your household income is less than £15,390 per year (after tax) can apply for free school meals for older children.
• All primary school children in Wales can access free school meals. An older child in your care may be eligible for free school meals if you receive certain benefits (including Universal Credit if your household income is less than £7,400 per year after tax (not including any benefits)).
• In Northern Ireland, children in primary school whose families receive Universal Credit and have a household income of less than £15,390 per year are entitled to free school meals.

Junior ISAs

Junior Individual Savings Accounts (Junior ISAs) are tax-free savings accounts for children and young people under the age of 18. 

• The government will open a Junior ISA and deposit a one-off £200 payment for any child who has been looked after continuously for 12 months or more. (The payment can be made into an existing Junior ISA if required.)
• The money belongs to the child but cannot be accessed until the child is 18.
• Children over the age of 16 can take control of their accounts but cannot withdraw the money until they are 18.
• Anyone can pay into a Junior ISA as a way of building up long-term savings for a child.

Note: The money in a young person’s Junior ISA will be treated as savings if they apply for Universal Credit. Currently, savings over £16,000 make you ineligible for Universal Credit and any savings over £6,000 reduce the amount of Universal Credit you can get.

Vehicle tax exemption and Blue Badge

If you care for a child who receives the higher rate mobility component of Disability Living Allowance (DLA) or Child Disability Payment, or the enhanced rate of Personal Independence Payment (PIP) or Adult Disability Payment, you may be able to claim vehicle tax exemption if you use your car for transport. You may also be able to receive a Blue Badge for parking concessions from your local council or trust.

You can apply for a Blue Badge if a child in your care has difficulty walking, even if they do not receive any financial benefits because of a disability or mobility impairment.

16 to 19 years bursary fund (England)

This fund provides additional financial support to help a young person who is studying at a publicly funded school or college, or on a training course, including unpaid work experience, with education-related costs.

A young person can receive £1,200 if:

• they are in or have recently left local authority care, or
• receive Universal Credit in their own name, or
• they have a disability and receive benefits related to their inability to work. 

The information we have provided here is offered as a general guide. Every individual’s financial situation is different, and the benefits system can be complex, so we recommend seeking specialist advice about your specific and individual circumstances.

You may find some of the following resources helpful:

• gov.uk/browse/benefits - government information about the benefits and financial support available in different circumstances
•  citizensadvice.org.uk - Citizens Advice provides free, confidential and independent advice on a range of issues including welfare benefits, face-to-face. You can ask them for a ‘benefits check’ or for support to claim Universal Credit
• turn2us.org.uk - Turn2Us is a charity providing information about benefits (but not individual benefits advice) including an online benefits calculator
• entitledto.co.uk - Entitled to also provides a free online benefits calculator with the option to compare calculations for “what if” or “better off” scenarios
• advicelocal.org.uk - your local council may have a welfare rights or money advice service