Does The Foster Carer Allowance Affect Universal Credit?

Universal Credit is a means-tested benefit that is designed to help people, who are on a low income or out of work, with their living costs.

People who used to receive Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) or Working Tax Credit, will now just receive Universal Credit.

If you are on universal credit and you are fostering, please call us on 0121 794 2289 for more information and advice.

Our Foster Carer customers often ask us about Universal Credit, here are the answers to some of the key questions:

Can Foster Carers Claim Universal Credit?

You can claim universal credit as a foster carer as long as you satisfy the eligibility rules. Fostering allowance should be ignored when working out how much Universal Credit you can get.

Q. Who Gets Universal Credit?

A. It’s available to people who are of working age (subject to conditions both in and out of work). As it’s means-tested, claimants can lose their entitlement, if they have capital over £16,000.

Q. How Does Being A Carer Affect Universal Credit?

It will be counted as income if you are getting Universal Credit but you may also qualify for a carer’s element as an additional payment. It can also affect the benefits of the person you’re caring for. Please contact us for bespoke benefits advice.

Q. How is Universal Credit paid?

A. Via a single monthly payment that’s made monthly in arrears into the nominated bank account. In some circumstances, payments can be made more frequently or split.

It usually takes at least five weeks from the point of applying for the first payment to come through.

Q. How much Universal Credit will I get?

A. The Department for Work and Pensions (DWP) is responsible for calculating people’s payments, which they assess by taking the whole family situation into consideration.

Any relevant household income will be deducted to calculate the credit that’s due while fostering income is disregarded.

For example –

You’re a couple – you work full-time, earning £25,000, and your partner fosters a child aged 13. You also have a five-year-old birth child and live in a three-bedroom rented property. You pay your private landlord £600 a month in rent.

This is how the DWP will calculate your universal tax credit payments

Details £
Couple 498.89
Child (birth) 277.08
Rent 600.00
Less – monthly income £2,083 63% less £192 (1,187.00)

Q. What happens after my payment’s been calculated?

A. Once the DWP have determined the household entitlement, they will put each claimant into one of the four conditionality groups:

GROUP 1: No work-related requirements
This could be claimants with Limited Capability for Work-Related Activity (LCWRA), carers of severely disabled people, lone parents or lead foster carers with a child under the age of one.

GROUP 2: work-focused interviews only
For instance, lead foster carers with foster children under the age of 16 (18 in some exceptions).

GROUP 3: Work preparation
Claimants with Limited Capability for Work (LCW) tend to be placed within this group.

GROUP 4: All work-related requirements
Can be subject to modification based on hours and applies to people such as partners of lead foster carers.

Q. Are there any exceptions to the rules?

A. Yes. When a child has left their foster carer’s household and the lead carer wants to continue fostering, they are allowed to spend an unbroken period of eight weeks in Group 2 before any other relevant requirements come into force.

Furthermore, in the case of couples (where one is over the age of 65 and the other is under 65), no new claims for pension credit or other legacy benefits can be made. If they require-means tested support, only Universal Credit will be granted, which could significantly impact their overall benefits entitlement.

If you’re a foster carer who’d like to discuss any Universal Credit queries you may have that haven’t been covered above, get in touch with us today for free, impartial advice. Click here for more information on benefits that you could be eligible for as a foster carer.


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