Pensions and tax exemptions for foster carers
Home responsibilities protection
Foster carers are entitled to home responsibilities protection (HRP). This means that the number of years foster carers need to work to qualify for the state pension will be reduced to take into account their years of caring. This change will increase foster carers' financial security and recognises the importance of the work that they carry out.
Click for more information on HRP on the Pensions Service website.
Income tax exemption
Foster carers are entitled to an income tax exemption, up to a certain threshold, for their fostering after April 2003.
The threshold has two elements: a fixed amount to cover capital costs (£10,000 per year for 2003-4) and an additional amount per child (£200 per week for a child up to the age of 11 and £250 per week for a child aged 11 or over for 2003-4).
This is an important change which will make sure that foster carers are not unfairly taxed on the expenses they incur through fostering.
For more information on income tax exemption, please contact HM Revenue and Customs.
This page was last updated on 19 October 2005
