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Families with adopted or fostered children
If you are caring for a child who has been placed with you by
the Local Authority (LA), there are special rules about the
treatment of any payments or allowances paid to you to help
maintain that child, and how such monies may affect your
If the LA has placed a child with you under certain legal
provisions, you may receive one of the following allowances:
Depending on which one you receive, different rules apply as to
whether the child is included in your household for benefits
purposes and whether these allowances are taken into account as
income for means-tested benefits.
What about means-tested benefits?
If you are in receipt of Income Support, Income Based Jobseekers
Allowance, Employment and Support Allowance (Income
Related), Pension Credit, Local Housing
Allowance (LHA), Housing Benefit and Council Tax
Benefit, the rules below show how payments made by the LA may
affect these benefits.
An Adoption Allowance is disregarded in full for Pension Credit,
Income Support, Employment and Support Allowance (Income
Related) and Income Based Jobseekers Allowance, unless your benefit
still includes amounts for children included in your claim since
before 6 April 2004 and for whom you do not yet have a claim for
For all working age clients’ claims to
LHA, Housing Benefit and Council Tax Benefit, it is taken into
account up to the level of the adopted child’s personal allowance
and any disabled child premium and anything above that is
Adoption Allowance is disregarded in full for pension age
clients for Housing and Council Tax Benefit claims.
Child Benefit and Child Tax Credits may be payable as long as
payments of Adoption Allowance do not include monies paid under
Section 23 of The Children’s Act, towards the maintenance and
Allowance, Disability Living Allowance and Working Tax
Credits can still be claimed.
- Foster Carers can claim Carer's Allowance as long as any reward
element included in the Fostering Allowance does not exceed that
current year’s lower earning limit.
- The cared for person/child is in receipt of Disability Living
Allowance (DLA) at the middle/high rate care component or any rate
of Attendance Allowance.
Disability Living Allowance
DLA continues for a child who is placed in foster care.
- The Social Worker and DLA unit decide who this is paid to;
- This could be the parent, foster parent or another appointed
- If the child was not intended to be in care for more than 12
weeks, the original appointeeship will not be ended until eight
weeks has passed.
If a child is placed or boarded out with you and you receive a
fostering allowance, that child is not counted as part of your
family and you cannot have an allowance for that child included in
your claim for:
- Income Support
- Jobseekers Allowance (income-based)
- Employment and Support Allowance (Income Related)
- Housing Benefit/Council Tax Benefit
- Local Housing Allowance
- Child Benefit
- Child Tax Credit
- Working Tax Credit
- Pension Credit
However, if you are in receipt of one of these benefits already,
then the amount of Fostering Allowance you receive is ignored
altogether as income.
Benefits you can claim for the child are:
- Disability Living Allowance;
- Carers Allowance;
- Working Tax Credit.
Residence Order Allowance
- This is treated the same way as the Adoption Allowance.
- If the Local Authority makes a lump sum payment to you to make
adaptations to your home for a disabled child, this is treated as
capital and ignored.
Child Tax Credits
Child Tax Credit is paid to families with children. It replaces
the child elements that were previously paid with Income Support or
Income-based Jobseekers Allowance, Working Families Tax Credit and
Disabled Persons Tax Credit.
The HM Revenue & Customs pays Child Tax Credits.
How do you qualify?
- Your income is sufficiently low.
- You have at least one dependant child or young person for whom
you are responsible.
- You are present in Great Britain and not subject to immigration
Being responsible for a child means that he/she is resident with
you and that you count as having the ‘main responsibility’ for the
child. However, you do not count as responsible if the child is
being fostered or if the child is with you waiting to be adopted.
Working Tax Credits
Working Tax Credit is paid to low-paid workers.
It tops up your wages if you are in part-time or full-time work.
This benefit replaces all the adult elements of Working Tax Credit
and Disabled Persons Tax Credit.
The HM Revenue & Customs administers Working Tax
To qualify, you must:
- be working at least 16 hours a week;
- have a sufficiently low income;
- be present and resident in Great Britain and not subject to
You may qualify for an additional amount of money if you are
disabled and that disability puts you at a disadvantage of getting
a job or you or your partner work more
than 30 hours per week.
When calculating Tax Credits, both you and your partner’s gross
taxable income is taken into account and compared against the
levels that the government have stated are applicable for your
If you receive a fostering allowance from the
Local Authority or voluntary organisation, this is ignored as
income so long as it does not count as taxable profits of a
If you receive an adoption allowance for a
child who is a member of your household, it is ignored
Statutory Adoption Pay (SAP) and Statutory Paternity Pay
SAP and SPP were introduced on 6 April 2003. If you have
recently adopted a child you may be entitled to SAP or SPP. You may
also be entitled to SPP if your partner has recently given birth or
has adopted a child.
Your employer pays SAP and SPP in the same way as Statutory Sick
Pay. You do not have to have paid enough National Insurance
contributions, but you do have to satisfy employment and earning
conditions. Your entitlement is not affected by any other income or
savings that you may have.
- a child has been or is expected to be placed with you for
adoption under UK law; and
- you satisfy the continuous employment condition of being
employed for a continuous period of 26 weeks ending with the week
in which you were notified you have been matched for adoption;
- you satisfy the earnings condition of earning at least the
lower earnings limit; and
- you have given your employer the required amount of notice – 28
days before your adoption pay is due to start; and
- you are not claiming SPP.
You cannot work for an employer while claiming these
How to claim
Claims and payment are made in agreement with your employer.
Families with adopted or fostered children leaflet
Families with Adopted or Fostered Children leaflet (pdf
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