Chancellor’s Budget provides 80 per cent tax savings for foster parents

The 2023 – 2024 Budget has shown that foster carers will see an increase to their qualifying care relief (QCR) for the first time in 20 years. 

Fostering households could see a close to £30,000 increase in the amount of tax-free money they can now earn if they are looking after two children over the age of 11.

Before the new Budget was released, foster parents could earn just shy of £50,000 before being taxed due to QCR and the Personal Allowance. 

This tax relief particularly alleviates people who are working other jobs alongside fostering or those families who look after more than one child. 

The new increases mean that it is now more cost effective for a foster parent to work and foster at the same time. 

Jenny Huggins is the registered manager at local fostering agency Fosterplus in the Midlands and is hoping that more people will consider fostering as a result of this new financial breathing room.

She said: “It is fantastic news that QCF for foster parents is being increased for the first time in 20 years, and by such a significant amount. 

“This will have a real impact on foster parents’ finances at a time when all household budgets and the cost of living are on the up.” 

Fosterplus has noticed that some prospective foster parents did not progress their applications because of uncertainty around finances.

Jenny said: “Hopefully these changes will alleviate some of these concerns for people and encourage a wider range of families to come into this rewarding and life-changing vocation.”

Jane Harkin has been fostering with Fosterplus since 2020 alongside being a birth mother, grandmother and aunty.

Jane said: “Fostering makes an indescribable difference to a person’s life, and despite being a very busy person I am so glad that I decided to make room for fostering. 

“The impact you can have on a young person’s life is truly incredible, and I’m not sure there’s much more rewarding than this. 

“I hope that the increase in QCR for foster parents means that more people will either consider fostering for the first time, or be able to open their home to more than one child that needs a loving home.”