House of Commons · Westminster Hall
15 January 2024 · 10 other contributors · 6,456 words
Opened by Martyn Day SNP Linlithgow and East Falkirk
Responding minister: David Johnston
Summarised by AI from the official record, so it can contain mistakes.
Martyn Day raised concerns about foster carers: allowances and tax arrangements in Westminster Hall. A government minister responded.
Key points
Key requests to Government
I ask the government to review and increase allowances for foster carers, address disparities in tax exemptions, and ensure that national minimum allowances reflect true care costs. The Fostering Network's proposed funding framework should be considered to simplify and standardize payments across all local authorities.
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
The petition highlights financial pressures on foster carers, with 43% considering leaving the role in two years. The cost of living survey showed that 90% felt allowances did not cover care costs, 56% had no allowance increase over six to twelve months, and 38% experienced mental health issues due to financial stress. Additionally, local authorities vary significantly in their payment rates for foster carers across the UK, creating a postcode lottery.
Does the hon. Gentleman agree that foster carers cannot be members of trade unions because they are not employees, leading to a lack of support available to typical employees? Andrew Western thanked Emma Hirst, a former foster carer with over 20 years of experience, for her work. He highlighted the challenges faced by current foster carers due to cuts in public services caused by austerity measures. He noted that Emma was unable to access sick pay or other employment benefits while registered as self-employed and eventually stopped fostering due to burnout. Andrew stressed the importance of financial support for foster carers, noting that local authority funding may be insufficient for the announced 6.88% uplift in foster care allowances. He called on the Minister to clarify how this increase will be funded and to consider monitoring compliance with the national minimum allowance.
The Foster Care Allowances Scheme has been vital in supporting carers, but we need to ensure that it continues to evolve to meet the changing needs of those involved. I call for a review of the tax arrangements and suggest ways to improve financial support.
I emphasise the critical role foster carers play in supporting vulnerable children and highlight the need for better recognition through improved allowances and tax benefits. I also raise concerns about the current system's complexity.
I discuss the challenges faced by foster carers in Northern Ireland and suggest ways to align our schemes more closely with those in England, Scotland, and Wales. I also highlight the need for better financial support through allowances.
The Foster Care Allowances Scheme has been a lifeline for many carers, but it needs to adapt to current financial pressures. I highlight the importance of recognising foster carers as key workers and providing them with better tax incentives.
I want to raise awareness of the importance of fostering and how it helps children in care. I also urge the government to consider the tax implications on foster carers.
I raise concerns about the complexity of the tax arrangements for fostering and suggest simplifying the current system to make it more accessible. I also discuss the need for additional financial support through non-means-tested allowances.
The Foster Care Allowances Scheme has been pivotal for many families, but we need clarity on how it will evolve in light of recent changes. I also mention the ongoing support foster carers receive through various local initiatives.
Foster carers provide a loving home for 68% of looked-after children in England, but they face significant financial challenges due to the cost of living crisis. Seema Malhotra highlighted that 92% of foster carers feel financially worse off and 18% have been pushed into debt. She also noted that some fostering services pay below the national minimum allowance by up to £2,333 per year for an 11 to 15-year-old child.
The Foster Care Allowances Scheme has been crucial in supporting carers, but we must address issues of complexity and inconsistency across different regions. I urge the government to introduce clearer guidelines and more consistent support.
Government Response
David JohnstonIt is a pleasure, Sir Graham, to serve under your chairmanship. I start by thanking all those who have signed the petition on this important issue; I also thank the Petitions Committee for scheduling this debate; and I specifically thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for leading it. Foster carers provide transformational support for children in care, building relationships that are loving, long-standing and deeply valued by the children they look after. The petition called on the Government to review and increase the allowances paid to foster carers and to consider tax exemption levels; I note that financial support continues to be a particularly important issue as household expenses remain high. We have increased the minimum fostering allowance by 12.43% and raised qualifying care relief for foster carers, with the latter change representing an average tax cut of £450 per year. In April 2024, allowances will increase by a further 6.88%, marking two consecutive years of above-inflation increases; this means that a foster carer in the tax year 2024-25 will earn between £1,456 and £2,548 more than in the previous year. I have committed to raising qualifying care relief by the consumer price index measure of inflation every year. Foster carers benefit from various financial support categories including national minimum allowances, fee payments set locally by councils, and agreed expenses with fostering service providers. Councils and agencies provide extra support for children with complex needs, including travel expenses or reimbursement for school trips. For tax arrangements, the first £18,140 of income is now tax-free, up from the previous level of £10,000; this simplifies the tax return process that foster carers have to complete. Foster carers can access a range of benefits, and the money they receive from fostering is disregarded when calculating means-tested benefits. I will consider collecting more data to ensure that the minimum allowance is being paid by local authorities. The 6.88% increase is additional money through the local government finance settlement and core spending; we are investing £36 million to improve recruitment, retention, approvals, and help more people undertake this vital role. In conclusion, I am committed to our programme of reform and proud of the Government's record levels of investment and support for foster carers.