Money Matters and Insurance

The Fostering Services Allowances and Payments are currently made up of the Fostering Network recommended rates, plus a fee element, and are reviewed annually. The Service prides itself on listening to foster carers and their representatives in the East Sussex Foster Care Association when up-rating and making changes to foster carer’s allowances and payments.

The Fostering Service is committed to paying competitive payments and allowances and developing and strengthening the Placement Support Service to foster carers, again in line with feedback provided by foster carers about what would help them in the fostering task.

Supervising social workers will keep foster carers up to date with the current rates and allowances for the children and young people placed with them.

All foster carers should be paid by automatic transfer into their bank or building society account.

Our current rates can be found in the local resource section.

Payments are made Fridays by bank transfer, comprising the four nights in arrears (Monday to Thursday) and three nights in advance (Friday to Sunday). Payments entered on the system by the end of Monday are paid on Friday the same week. Payments entered Tuesday onwards are paid on Friday the following week. Remittance advice is sent to carers weekly detailing payments. If you need to change your bank details, request a Bank Details Form from the Fostering Team.

Carers should check the accuracy of all payments and inform the Fostering Team as soon as possible of any possible under or overpayment. If an underpayment is established, the service will pay any outstanding amount promptly. In the event of an overpayment, carers are expected to repay this in full; it should not be spent. Finance will automatically deduct up to 50% of your weekly payment, noting the overpayment and any instalment plans on your weekly payslip. In the event of there being no weekly payment, an invoice will be raised which will give full details of how to pay. 

Children in care in East Sussex are entitled to pocket money according to the following guidelines.

There needs to be a considerable degree of flexibility and lack of rigidity whilst maintaining a sense of fairness and consistency, both between foster children and between foster children and the carers' birth and adopted children.

The following principles should guide the payment of pocket money to looked after children and young people:

• Having pocket money is good for the child/young person. It gives a sense of independence and a measure of choice in making decisions about how the money is spent;
• Receiving pocket money helps children understand the value of money and is the start of developing budgeting skills;
• The amount to be paid must be clarified at the outset of a placement and addressed within the Placement Plan at the Placement Planning Meeting;
• The rate of pocket money paid should be kept under review by all concerned. Setting the appropriate level is dependent on close communication between the carer, child/young person and their social worker and your supervising social worker. Disputes over pocket money should be dealt with by informal discussion within the foster home in the first instance. If a child/young person is not happy with the amount paid, it should be clear how they can raise their dissatisfaction;
• Setting fixed amounts of pocket money is problematic and consideration must be given to individual circumstances of children in care and foster families. The amounts suggested below are minimum sums;
• In principle children in care and the foster carer’s birth children of the same age should get the same weekly pocket money and it would be unfair if foster children received either more or less than the foster carer’s own children;
• There should be an increase in pocket money by a fixed amount at each birthday. It is also suggested that pocket money is given out on a regular day each week;
• In many families an understanding may be reached that once a child is old enough to help out with basic household chores, top-ups to pocket money can be arranged in exchange for jobs done. In some foster placements this could be appropriate, especially in long term placements where such an understanding and trust could be built up over time. In shorter term placements this may be less easy to achieve or inappropriate;
• Achieving the right level of pocket money/monthly allowance is dependent on carers knowing the child/young person well and having a trusting relationship, with the child/young person developing a good understanding of the foster family’s culture regarding use of money;
• As a child gets older s/he may want more expensive extras which can be reflected in pocket money or be paid for by the carer out of the basic allowance received. For a teenager a monthly allowance to cover pocket money, clothing and other larger personal items should be considered (depending on their maturity and situation) and discussed with them;
• When children reach 10 years of age consideration could be given to provide them with a mobile phone depending on individual circumstances. However the start of secondary school maybe a more appropriate time. A child’s safety should be considered in decisions about providing a mobile phone. A child’s readiness and preparation should be a consideration. There is training and support available via Get Digital on the Digital Hive;
• In principle children should pay for their mobile phone data, texts and calls;
• To promote a child/young person’s positive contact with their family, top-ups to their pocket money will need to be made to enable birthday and Christmas presents to be bought for birth and foster family members;
• When a young person becomes a teenager, a monthly allowance to cover pocket money, clothing and other larger personal items should be considered (depending on their maturity and situation) and discussed with them;
• The rate of pocket money paid to young people should be realistic. It is the responsibility of carers and social workers to help ensure the smooth transition to independent living after foster care. It would be unhelpful to this process if a young person’s pocket money enabled her/him to enter into a lifestyle which was not possible if s/he later had to live independently;
• Pocket money could be withheld as a last resort but it should be saved or carried over until the next week.

Suggested Minimum Pocket Money Amounts:

Pocket money should not be paid to children under 5 years old. The significant change involved in a child moving to secondary school is reflected in pocket money paid. The following guidelines should normally be followed:

Personal allowances for a child/young person placed:

Fostering Network recommend that within the basic weekly allowance there is a ‘personal allowances’ element. This is intended to cover both pocket money and other personal expenses for children and young people which could cover such items as cosmetics, deodorants, sanitary protection, shaving equipment, dry cleaning, landline and mobile telephone calls and comics. It is important, particularly with older children, to be clear from the start about who pays for what! Some households will continue to supply many items as part of the weekly ‘shop’ or from the general housekeeping pool. There needs to be discussion at the outset of the placement about how much of the personal allowances element should be paid to the carer and how much to the young person, as pocket money and savings.

All young people placed in foster care are entitled to have a nominal amount of money put aside for them as savings during the length of their care experience (Long Term Savings). This money is not to be used for any purpose during the length of that child/young person being looked after; it should not be accessible to the young person until they reach the age of 18. Its purpose is to provide our young people money to aid their transition to adulthood. Children in the care of East Sussex County Council benefit from money set aside for them, to enable them to start independent living with some savings.

Previously in-house foster carers were tasked with opening saving accounts for young people in their care. These accounts were in the name of the child and not accessible by the child, social worker or foster carer to withdraw money. Some difficulties arose with this method around the opening these accounts with the paperwork available, or the delays that they have in receiving this information, as well as finding banks that would allow this. Opening accounts for some young people can be more difficult than other such as Unaccompanied Asylum Seeking Children due to their status and lack of valid ID. This can be made more complex when a young person moved quickly or frequently as savings can at times be forgotten. Also supervising social workers and social workers should not accept cash/cheques from any carers and there needs to ensure all monies are clearly tracked if there are any queries e.g. via BACS.

East Sussex County Council wanted to make this process simpler and remove any potential risks of money going astray or being spent prior to the young person turning 18. Therefore, a plan for East Sussex County Council to manage the savings 'at source' for each young person was developed. It was felt that savings for children and young people placed in house should be universal and that £5 per week (£0.83 per day) should be saved for each young person no matter what their age or how long they are placed in foster care.

Carers will not have the responsibility to make long term savings. Benefits of this are;

• Carers do not need to open a long-term savings account;
• Do not need to account for these or pass details on to new carers when children move;
• Do not provide details of these to supervising social workers or children's social workers;
• Savings are made automatically by the payments team from the weekly allowance before the carer receives this;
• All savings are recorded and can be tracked;
• All young people placed with in house carers receive the same amount each week from the point that they are placed in care.

Information about the Different Savings Accounts:

There are three types of account excluding carers opening their own accounts;

• East Sussex County Council Account;
• Share Foundation;
• Child Trust Fund (until 2029 when the remaining children in the scheme turn 18).

All young people placed with East Sussex foster carers will have an East Sussex Child in Care (LAC Savings) Account which is set up using a unique classification code for that child. All weekly savings will be paid into this account at source rather than being paid to the carer to manage. This money will be held in this account until either a Share Foundation account or Child Trust Fund is identified.

Share Foundation Accounts

Eligibility: All UK-resident Children in Care who have been continuously looked after for over a year. If there's a break of a single day, then the timer restarts. Respite placements do not count. All Junior ISAs start at £200 and accrue whatever interest is applicable at the time. The references typically look like this: TSF186187B, they all start with the letters TSF.

The only exception to this is children born between 01/09/2002 and 02/01/2011 they automatically DO NOT qualify, as they would have had a Child Trust Fund.

Does my Young Person have a Junior ISA?

Everyone who meets the above criteria should have one. The Share Foundation is automatically notified of all children who meet this on a monthly basis. It can sometimes take a few weeks for this to be processed but will happen without you needing to do anything.

Child Trust Funds

A Child Trust Fund (CTF) is a long-term savings or investment account for children in the United Kingdom. New accounts cannot be created but existing accounts can receive new money: CTF new accounts were stopped in 2011 and replaced by Junior ISAs as discussed above. Responsibility for these transferred to the Share Foundation in October 2017 for those young people that have been in care for a year or more. You can identify if a young person has a CTF by checking their date of birth as above.

Additional information:

Money will be paid from the East Sussex account into a Share Foundation or CTF when one is available on a quarterly basis from the East Sussex account so that a young person earns interest. These accounts close when a young person turns 18 and no further savings can be paid into them. The young person will receive a letter from The Share Foundation via East Sussex County Council to advise them of this money with a request of where to pay it. The Social Worker will be notified and asked to pass this letter on. The young person will need to complete a claim form (Maturity Option Form) and provide proof of identity to access to the account.

Short term Savings

All children and young people should be encouraged to learn about the benefits of saving and to develop a regular savings habit. Foster carers can help children open a personal savings account so that they can save some of their pocket money and money they receive for their birthdays or Christmas. Whilst children should have access to these accounts, foster carers need to support children to build on these savings. A personal bank or savings account should be set up and managed by foster carers. You will need proof of the child's identity (passport or birth certificate) and confirmation of the address. The child's social worker or your supervising social worker should be able to arrange these documents. A record of the amount saved and account details should be written up in the foster carer recording file.

N.B. You should never place a foster child's savings in your own account.

Existing Savings for Children in Care - Information for Foster Carers

The new savings account will be the main form of long-term savings for children so you should stop paying into the accounts you have set up for children in your care.

A reminder that current policy has been for foster carers to save money for children 5+ years. It has previously been recommended that foster carers put equivalent amounts into long term savings as the recommended pocket money amount.

If you have already set up a savings account for children in the child's name you will need to notify your supervising social worker and child's social worker of the details: account number, sort code and amount in the account on 1/4/18. This information can then be stored on the child's record for the future. It is important there is a record of this so please make sure you pass the details on.

If you have been saving for the child but not in an account in the child's name then the monies should be paid into one of the accounts referred to above via BACs or by cheque. If this applies to a child you have been looking after you will need to you contact your Supervising Social Worker who will give you the details about the East Sussex account into which the monies need to be paid so they can then be transferred into the child's savings account either via BACs or cheque. Once again it is important that this information is recorded so please inform your supervising social worker.

When a child ceases to be in care before 18:

When a child ceases to be in care e.g. via reunification, Adoption, or Special Guardianship Order, then East Sussex County Council receives a letter from the Share Foundation acknowledging the change of status (generally within 6-8 weeks). This letter gives instructions to the new legally responsible adult so that they can take responsibility (but not access) for the account until the child reaches 18. East Sussex County Council passes this letter to the child's social worker who will in turn pass to the relevant adult.

Qualifying Care Relief is an HRMC tax scheme for foster carers. It calculates a tax threshold unique to the fostering household and when compared with their total fostering payments, determines if a foster carer has to pay any tax from their fostering income or not. For many foster carers, their total fostering payments are below their tax threshold and they do not pay any tax. Refer to:

• Help and Support for Foster Parents in England;
• Qualifying Care Relief for Carers;
• Qualifying Care Relief Increase.

From 2023 budget onwards: QCR provides tax relief for carers comprised of:

• Their share of the fixed amount, currently £18,140, plus
• Weekly amounts for each cared-for child (or adult):
  • £375 for each child under 11 years of age
  • £450 for each child 11 years of age or older
  • £450 for each adult

As a foster carer, you may be entitled to claim benefits and tax credits. For further information about claiming benefits as a foster carer visit the Government’s website, or download HMRC’s leaflet on tax credits. Foster carers cannot claim Child Benefit for any fostered children who are placed with them. ESCC pays for all fully approved foster carers to become members of the Fostering Network who can advise about claiming benefits. There is some useful information on the Fostering Network website.

Foster carers can complete form CF411A to apply for national insurance to and maintain their National Insurance record. 

Your Supervising Social Worker can provide a letter confirming your approval.

Further information about National Insurance credits can be found on the GOV.UK website.

Foster Carers are registered as self-employed so need to make their own arrangements for a personal pension. There is some helpful information about this on GOV.UK, National Insurance credits: Overview.

At the start of every financial year all foster carers will be sent a copy of the revised allowances. Supervising social workers can also be asked for a copy.

Maintenance

Part of the weekly payment covers:

• All food, including special dietary needs, restaurant outings, school meals, powdered milk, baby and toddler food for the under fives;
• All toiletry requirements, haircuts and hair care, and nappies;
• All activities associated with family life, including baby-sitting;
• All clubs, general activities both in and out of school;
• All playgroup and nursery fees and all school holiday clubs.

Clothing

Part of the weekly payment covers:

• All clothing and footwear including school clothing and sportswear;
• As and when babies, children or teenagers grow out of their clothes, these should be replaced within the payment.

Transport and Mileage

Part of the weekly payment covers:

• All travel expenses associated with fostering. This includes bus fares and bus passes to school or college;
•  Travelling to meetings, doctor's appointments etc., and assisting with transport to contact and/or therapy where possible.

Personal

Part of the weekly payment covers:

• All the child’s recreational and personal needs;
•  Pocket money on a weekly basis. The amount needs to be agreed with the child’s social worker and the fostering social worker at the placement planning meeting (see also Section 22, Pocket Money);
• All the child’s birthday expenses.

Household costs

Part of the weekly payment covers:

• All heating, lighting, electrical and water usage – including extra fuel costs and telephone costs incurred when a child is placed. The day-to-day use of durable goods such as washing and drying machines, televisions and computers is also included;
• All household cleaning and normal upkeep, including wear and tear on the building and furniture. This also includes painting and decorating;
• Telephone calls – foster carers must allow children and young people to call family, friends and social workers in accordance with the arrangements agreed at the Placement Planning Meeting or LAC Review. If this becomes a problem, it must be discussed with the foster child’s social worker and the supervising social worker of the foster carer.

Holidays

Part of the weekly payment covers:

• The total cost of holidays, holiday schemes and holidays with friends.

Contact/family time

The weekly payment covers:

• All reasonable costs associated with promoting good contact/ family time with the child’s birth family. This could be by assisting with transport, having birth families in the foster home and providing tea, coffee etc.

Education

The weekly payment covers:

• All expenses associated with education, i.e. playgroup, nursery, school and college;
• Expenses for extra-curricular activities, books and equipment for courses;
• Funding for all educational school trips. Religious holidays allowance

This is paid automatically at Christmas time and is half the basic maintenance rate, according to the age band/s of the foster child/children.

Exceptional circumstances

As previously stated, foster carers are expected to budget from their weekly payments in order to cover all day-to-day expenses. The Department does recognise, however, that there may be some exceptional costs for some individual children. Assistance to help with these costs can be made by the Fostering Service via the child’s social worker and the supervising social worker. These may include:

1. Initial general clothing
   Occasionally children are placed without adequate clothing. An application can be made, and a sum agreed. Receipts will be required (every attempt will be made to retrieve clothing from home, previous placements or residential homes);
   

2. School uniform
   If a child changes school and the child has been in the placement for less than six months, then financial assistance can be given. The limit will be £150 and receipts will be required;
   

3. Transport
   In the case of contact/ family time requiring excessive mileage or an excessive mileage range, an application can be made for assistance;

4. Therapy
   In the case of facilitating therapy requiring excessive mileage, an application can be made for assistance;

5. Holidays
   If a child has been staying with a foster carer for less than six months, a contribution could be made towards a holiday. Foster carers will be asked if the child has had any other holidays with them, or school trips, and if any others are planned for the same financial year. Receipts will be required;

6. Education
   If a child has been staying  for less than six months a contribution can be made towards a school trip. Foster carers will be asked what other trips or holidays the child has been on and what is planned for that financial year. Receipts will be required;

7. Baby-sitting/childcare
   A child may need a different level of care on occasions that make using a foster carers’ regular babysitter or childcare arrangements difficult. A request to Placement Support to provide a Placement Support Worker can be made when foster carers have to go to training or other related meetings. The Supervising Social worker or Child’s social worker will need to make a referral to the Placement Support Service.

It is very important that foster carers do not spend any extra money before it has been agreed. The department cannot guarantee payment for things in retrospect.

Expenses are paid by the Fostering Service for making trips to hospital; attend reviews, contact arrangements or other exceptional travel expenses. This will be at of 45p per mile. To claim mileage expenses, send details of any claimable mileage to your Supervising Social Worker including the name of the young person(s) the mileage is regarding and dates on which the mileage took place. Claimable mileage is anything over and above 40 miles which is already paid for within the fostering allowance. 

Foster carers are not employees of East Sussex County Council but are classed as self employed and responsible for their own income tax and national insurance contributions. HM Revenue and Customs has a direct link on their website which links straight to a basic introduction to “Foster carer relief”. This very helpful guide contains information about tax and national insurance.

The Fostering Network produce booklets giving further information:

• Income Tax and National Insurance;
• Benefits: a booklet providing information on the range of benefits and tax credits available to children and foster carers.

You should keep a record of how the allowance is being spent on a child/young person. You should keep receipts where possible. The child/young person should sign for money if possible that they are given e.g. pocket money and clothing allowance. This helps build a record of what has been spent, which you can show if asked about it at a later date.

The Department expects all foster carers to take out adequate insurance cover. However, the County Council has arranged its own policy for theft, damage or injury that is not covered by the foster carer's own insurance.

The County Council's policy covers injury to a foster carer or theft of or damage to a foster carer's property caused by a child or young person being "looked after". It should be noted that this cover does not extend to any guest of the household, nor does it include motor vehicles that are normally, of course, covered by the owner's insurance.

Cover is also provided for any legal liability a foster carer may incur due to damage or injury caused to a third party by a foster child or young person being looked after.

Claim Forms detailing the circumstances surrounding the incident and accompanied by estimates, invoices or valuations, where appropriate, should be submitted to the Finance Section (Foster Care Unit) for onward transmission to the Insurance and Risk Management Officer in the Legal and Community Services Department of the council,

It should be noted that all claims are subject to a policy excess of £100 and that each incident of damage or theft is treated as a separate claim. Generally speaking, the foster carer is expected to meet the cost of the £100 excess. However, in certain cases the Department may meet all or part of the £100 excess depending on the particular circumstances.

You must inform your Home, Building and Contents and Car insurance company once you have been approved as a foster carer.

Tell them about the numbers of children and age ranges you expect to take. You should ask the insurance companies for written confirmation that they have included foster children on your policies. A copy of these letters should be given to your Supervising Social Worker.