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Fostering allowances tax relief tax credit working tax credits income rules
Income rules
The general rule is that taxable income is taken into account in calculating someone's Child Tax Credit and Working Tax Credit.
This includes someone's income from employment and self-employment, foster carers are classed as self employed.
However, the current rules mean many UK foster carers now pay no tax on the money they earn from fostering.
If foster carers total foster care receipts are less than their qualifying amount, the profit from foster caring for both tax and tax credit will be nil.
Fostering allowances which qualify for tax relief are ignored:
currently up to £10,000 per year £200 per week for each child under 11£250 for each child 11 or over.The rules about remunerative work are different for income support (IS) and jobseeker's allowance (JSA).
In some cases a foster carer might be able to claim either Working Tax Credit or Income Support, Job Seeker's Allowance or both.
From 2003 foster carers are entitled to Home Responsibilities Protection which helps towards getting a basic State Pension. This will change in 2010, HRP will be replaced by weekly credits for parents and carers (including foster carers).
The credits will count towards a basic State Pension and an additional State Pension. If a foster carer reaches State Pension age on or after 6 April 2010, any years of Home Responsibilities Protection received will be converted to credits.
Support and Job Seekers Allowance
fostering is probably the most rewarding job in the world.
Support and Job Seekers Allowance
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