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5.9.3 Staying Put Policy and Practice Guidance

This chapter details the arrangements for care leavers aged 18 and above to stay on with their former foster carers – a choice and policy now required by legislation and Regulation.

RELATED CHAPTERS

Leaving Care Policy

Pathway Plan Reviews Procedure

RELATED GUIDANCE

Staying Put, DfE, DWP and HMRC Guidance

NCAS, Staying Put: What does it mean for you?

AMENDMENT

This chapter was updated in May 2017 to add a link to ‘NCAS, Staying Put: What does it mean for you?’


Contents

  1. Executive Summary
  2. Aims of Staying Put
  3. Legal and Policy Context
  4. Definitions of Staying Put
  5. Monitoring and Reviewing Arrangements
  6. Ending the Staying Put Arrangement

    Appendix 1: Practice & Procedure

    Appendix 2: Financial Arrangements

    Appendix 3: DWP & HMRC Frameworks


1. Executive Summary

The Children (Leaving Care) Act 2000 recommended the conversion of foster placements of children in care at age 18 into supported lodgings arrangements. The Planning Transitions to Adulthood for Care Leavers (Regulations & Guidance) 2010, the Fostering Service (England) Regulations 2011 (Children Act 1989) and the National Minimum Standards for Fostering Services 2011 all required local authorities to have Staying Put procedures in place.

Joint guidance was issued in May 2013 from Department for Education (DfE), Department for Work & Pensions (DWP) and Her Majesty’s Revenues & Customs (HMRC) in respect of arrangements where young people aged 18+ years could remain living with their former foster carers.

The Children and Families Act 2014 amended Section 23C of the Children Act 1989 (a new section 23CZA) that placed a new legal duty on local authorities to support every care leaver who wants to stay with their former foster parents until their 21st birthday. The regulations and guidance of this requirement is laid out in “Volume 3 Planning Transitions to Adulthood for Care Leavers”, Chapter 7: “Planning and arranging suitable accommodation for the transition to independent living” (Sections 7.19 to 7.59).

This policy will enable Brighton and Hove City Council to implement the Department for Education Staying Put policy framework and related joint guidance from HM Government and therefore will enable young people to make an extended transition to adulthood with a consequential improvement in outcomes. 


2. Aims of Staying Put

This policy relates to arrangements for young people after their 18th birthdays who have been in the care of the local authority. From the age of 18 young people are no longer legally ‘in care’ or Looked After. In circumstances where a young person remains with their former foster carers after their 18th  birthday, this is described as a “Staying Put” arrangement.

With the average age of leaving home in the UK rising, (from 23 years in 2001 to 27 years in 2013), the primary aim of a Staying Put Policy is to promote, in a family setting a gradual transition for young people from a stable foster placement into adulthood and independent living.

Staying Put’s intention is to:

  • Extend the transition to adulthood within a supportive family environment;
  • Ensure young people can remain with their former foster carers until they are prepared for adulthood;
  • Experience a transition similar to their peers;
  • Avoid social exclusion;
  • Ensure future stable housing and tenancy sustainment;
  • And ensure that the gap in the quality of life between those in the care of a local authority and those raised in supportive families is significantly reduced.

Staying Put fits with Brighton and Hove City Council's aspiration to be a good Corporate Parent to all young people for whom it has acted as a substitute family. The Council is committed to promoting the social inclusion of young people in care and those who have left its care and has developed this policy to ensure those vulnerable and those in education, training and employment receive continued support. The policy sets out the conditions required to extend a former foster placement beyond a young person’s 18th birthday. It includes the entitlement and establishment associated with extending such placements, the financial implications for young people and carers, the social care requirements and Income Tax, National Insurance and Welfare Benefits issues.

Consultation on the “Staying Put” Policy took place during September and October 2013 with stakeholders including in-house foster carers, agency providers, Children’s Services officers and the Children in Care Council. Relevant feedback received has been incorporated into this policy. 


3. Legal and Policy Context

The Staying Put Policy aims to meet objectives within the Children Act 1989 and the Children (Leaving Care) Act 2000 to improve the life chances of young people in and leaving local authority care. The Staying Put arrangement promotes the Acts’ main aims to young people which are to:

  • Delay young people's discharge from care until they are ready and prepared;
  • Improve assessment, preparation, planning for leaving local authority care;
  • Provide better personal support for young people leaving local authority care;
  • Improve financial arrangements for young people leaving local authority care;

The Children and Young Persons Act 2008 emphasised a more graduated approach to transitions to adulthood planning and required each local authority to begin to promote the extension of foster care placements beyond a young person’s 18th birthday. 

The guidance of the Children (Leaving Care) Act recommends converting foster placements at 18 years into supported lodgings. The Planning Transitions to Adulthood for Care Leavers (Regulations & Guidance) 2010, the Fostering Service (England) Regulations 2011 (Children Act 1989) and the National Minimum Standards for Fostering Services 2011 all require local authorities to have Staying Put procedures in place. These procedures are required to set out the practical, financial, tax and benefit issues for foster carers and young people when foster care is extended post-18 years.

In addition the following policy and regulatory drivers apply:

  • In October 2012 the Children’s Minister urged all local authorities to develop ‘Staying Put’ arrangements;
  • From 2013/14 the Department for Education requires local authorities to provide data on the number and percentage of 19, 20 and 21 year olds living with former foster carers;
  • In the 2013 Ofsted Inspection Framework for Children’s Services a measure of being a “good” service is that “care leavers can remain in placements beyond their 18th birthday”.

In May 2013 the Department for Education (DfE), Department for Work & Pensions (DWP) and Her Majesty’s Revenues & Customs (HMRC) issued joint guidance in respect of arrangements where young people, after the age of 18 who were previously looked after could remain living with their former foster carers(1) Local authorities were invited to develop a “Staying Put” policy that would provide the information and guidance relating to all aspects of continuing the young person’s accommodation with their carer beyond the young person’s 18th birthday.

(1) HM Government “STAYING PUT” Arrangements for Care Leavers aged 18 and above to stay on with their former foster carers DfE, DWP and HMRC Guidance May 2013

The Children and Families Act 2014 amends the Children Act 1989 by placing a new legal duty on local authorities to support every care leaver who wants to stay with their former foster parents, with their consent until their 21st birthday.

This duty details in Section 23CZA (3) was implemented on 13th May 2014.

As young people at 18 years are legally adult, fostering regulations no longer apply. Following their 18th birthday, the legal basis on which they occupy the foster home changes and having signed a licence agreement, they become in law an “excluded licensee”, i.e. a lodger in the Staying Put carer’s home. 

As a minimum, local authorities need to ensure a “Staying Put” arrangement is deemed “suitable accommodation” to meet the requirement of Regulation 6, 7 & 9 and Schedule 2 of the Planning Transition to Adulthood Guidance, which includes the Care Leavers (England) Regulations 2010.


4. Definitions of Staying Put

The key definition of Staying Put provided by the Department of Education is used to define arrangements where:

  • A young person who was looked after immediately prior to their 18th birthday as an Eligible Child, continues to reside with their former foster carers;
  • The carer/s were acting as foster carers to the child immediately prior to the young person’s 18th birthday (that is, the carers were approved as foster carers in accordance with the Fostering Service (England) Regulations 2011 and the child had been placed with them by the local authority, or via an Independent Fostering Agency);
  • A young person is deemed an eligible child, within the meaning of paragraph 19B(2) of Schedule 2 to the Children Act 1989, immediately before he/she reached 18;
  • The “Staying Put” arrangement is set out in the child/young person’s Pathway Plan;
  • A proportion of the allowance paid to the “Staying Put” carer/s is paid by the Local Authority Children’s Services under Section 23C, Children Act 1989;
  • The “Staying Put” arrangement extends until:
    • The young person first leaves the “Staying Put” arrangement; or
    • The young person reaches their 21st birthday if continuously living in the arrangement; or
    • The young person completes their agreed programme of education or training on their 21st birthday, if continuously living in the arrangement since their 18th birthday.

DfE “Staying Put” arrangements therefore cover all young people who were previously eligible children living in foster care, and who were looked after immediately prior to their 18th birthday, as long as the arrangement meets the above criteria, regardless of whether the young person is undertaking full or part education, training or employment or none of these activities.

Where possible, DfE, DWP and HMRC definitions and frameworks relating to “Staying Put” have been harmonised. The definitions from DfE, DWP and HMRC acknowledge that when Staying Put is in place it is on the basis that the young person was previously Looked After and remains with their former foster carers after the age of 18 years.

With the exception of the HMRC criteria regarding young people being able to return to a different Staying Put carer between the age of 18 and 21 or until the completion of an education or training course, all of the other criteria acknowledge that Staying Put arrangements are continuing under the premise that the young person was previously looked after and is remaining with their former foster carers.

Appendix 3: DWP & HMRC Frameworks provides detail of the DWP and HMRC frameworks for tax and welfare benefits purposes.


5. Monitoring and Reviewing Arrangements

Staying Put Arrangements should be reviewed at the Pathway Plan Review at a minimum of every 6 months. This should include a review of any problems or difficulties which have emerged and what is working well. A review can be arranged earlier by agreement between the young person, carer and professionals involved. The young person and carer can also access advice at any time from their Social Worker or Personal Adviser or Supervising Social Worker.

Note: Where a Staying Put arrangement is in place, the local authority, where appropriate, may consider delegating part of the Personal Adviser function to the foster carer. (See DfE, The Children Act 1989 guidance and regulations -  Volume 3 Planning Transitions to Adulthood for Care Leavers (Jan. 2015).

Where a young person is living in a “Staying Put” arrangement that is broader than the DfE “Staying Put” definition, i.e. the “Staying Put” carer is no longer a registered foster carer, the local authority will need to ensure the arrangement meets the ‘suitable accommodation’ requirements of the Planning Transition to Adulthood Guidance, which includes the Care Leavers (England) Regulations 2010.


6. Ending the Staying Put Arrangement

The Staying Put arrangement can be ended before the young person's 21st birthday by the young person or former carer giving relevant notice. Both parties should give as much notice as possible and in most circumstances be a minimum of 28 days. The licence agreement allows for the ending of the arrangement with 7 days notice for a breach of the agreement, but in exceptional circumstances it can be terminated with immediate effect.

The Staying Put arrangements will end when the young person becomes 21. If the young person is at a critical stage in their education (e.g. final exams) at this time they will be able to Stay Put until completion. Advance planning will be necessary to ensure young person can move on successfully to suitable accommodation from their Staying Put arrangement.


Appendix 1: Practice & Procedure

1. Change of Status from Foster Care to Staying Put

While the legal basis upon which a former foster child occupies their foster carer’s home changes when they reach their 18th birthday this should not denote that the young person will be treated differently than when they were living there as a fostered child.

The associated change from foster child to adult member of the household and for the carer from foster carer to Staying Put carer, (technically the young person’s landlord), needs to be carefully and sensitively planned to ensure that both the young person and carer understand the nature of the arrangement and that the positive aspects of being in foster care are not diminished by new legal and financial arrangements and terminology.

The term 'arrangement' should be used rather than 'placement' as this denotes a situation where the local authority arranged and placed the child with a foster carer. Once the young person reaches 18 and legal adulthood, the local authority is no longer making a 'placement', but facilitating an 'arrangement'.

2. Entitlement to Stay Put 

This policy applies to all children in care who are approaching 18 years and covers ‘in-house’ foster and Independent Fostering Agency foster carers. It also covers those in-house supported lodgings carers who have been assessed and approved under Fostering Regulations. The policy recognises that many young people in care experience delayed maturity and that their 18th birthday may not be the most appropriate time for them to move on from foster care. 

The policy is designed to ensure young people do not experience a sudden disruption to their living arrangements, educational achievement and continuity is promoted and vulnerable young people can make a gradual transition from care to adulthood and successful independent living.

2.1 Young People in Education, Training, Employment

A young person reaching 18 years is entitled to Stay Put if engaged in a programme of full-time further education or training or employment (ETE) with the agreement of their foster carer and agency, whether in-house or independent. For some young people where part-time attendance at college is a major achievement or when college courses are only available on a part time basis, eligibility to Stay Put will also apply.

A young person who is not engaged in ETE may also Stay Put. The young person will be supported, encouraged and motivated to become positively contributing by involvement in work preparation or voluntary work and additional personal support from the Employment & Training Personal Adviser.

2.2 Vulnerable Young People

For vulnerable young people, Staying Put will apply where they have a delayed maturity and/or development. These young people may function at a dependent level but do not have a disability. Where they have assessed needs linked with a disability they will have ongoing eligibility for community care from Adult Social Care. This will be provided by learning disability, physical disability or mental health services where the following criteria are met:

A learning disability is defined as those individuals referred to the health and social care Community Learning Disability Team services must:

  • Have a diagnosed learning disability which includes the presence of a significant reduced ability to understand new or complex information, to learn new skills (impaired intelligence) with a reduced ability to cope independently (impaired functioning) which started before adulthood with a lasting effect on development;
  • Be over the age of 18 or identified within the Transition Pathway;
  • Be registered with a GP in Brighton and Hove and/or ordinarily resident within Brighton and Hove;
  • Be able to demonstrate that they will benefit from/need the expertise and services which can only be provided by a specialist learning disability service.

For young people who meet these criteria, they will be eligible for Shared Lives, provided either in-house or from the Grace Eyre Foundation and funded from Community Care.

For physical disability, the legal definition of disabled comes under the National Assistance Act 1948 Section 29 (1) and to qualify for services under this Section, persons must:

  • Be aged 18 or over who are blind, deaf, or dumb, or who suffer from mental disorder of any description, and other persons aged 18 or over who are substantially and permanently handicapped by illness, injury, congenital deformity or such other disabilities as may be prescribed by the Minister”;
  • Local Authority Circular (93) 10 Appendix 4 asks local authorities to give a wide interpretation to the term ‘substantial’ to take full account of individual circumstances and a flexible interpretation to the term ‘permanent’ in cases where they are uncertain of the duration of the condition. Examples include episodic or recurring illness and intermittent disability/conditions.

For mental health problems and/or issues:

  • Mental illness refers to a “diagnosable condition that significantly interferes with an individual's cognitive, emotional or social abilities e.g. depression, anxiety, schizophrenia”; (1)
  • Mental health is defined as a “state of well-being in which every individual realises his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community”.(1)

(1) NIACE (2009) Working with Learners with mental health problems carers under.

2.3 Young People in Planned Move-on from Foster Care

Where young people at 18 years have been assessed as being ready and able for independent living and have been referred to Housing under the Joint Protocol for Care Leavers and are about to start bidding for their own tenancy via Homemove, they will be entitled to remain with their foster carers under a Staying Put arrangement until they are successful with their bidding and have been allocated a local authority or housing association tenancy.

3. Establishing a Staying Put Arrangement

The option of Staying Put should be explored as early as 16 ½ years as part of Pathway Planning. Early discussion with the young person’s foster carer should take place as their agreement is essential before any more detailed planning can take place. Final agreement needs to be in place by the time the young person reaches 17 ½ years and the framework below shows how this can be explored:

  • Is the young person in agreement with the Staying Put proposal?
  • Is the foster carer in agreement with the Staying Put proposal?
  • What are the views of other children in that foster placement and of their Social Workers to the Staying Put proposal?
  • Do the young person and their foster carer understand the changes in relationships associated with converting a foster placement into a Staying Put arrangement?
  • Does the young person understand the financial and benefits responsibilities associated with being in a Staying Put arrangement?
  • Does the foster carer understand the changes in their funding arrangements associated with Staying Put?
  • Does the foster carer understand the impact of a Staying Put arrangement on their income tax and welfare benefits?
  • What is the contingency plan should Staying Put not be a viable option?

Young people remaining with their foster carer/s at 18 will become adult members of that household and will require a valid DBS disclosure where a foster child(ren) are in the same placement or planned to be in that placement. This process will need to commence when the young person reaches their 18th birthday.

The above should be discussed and agreed at the young person’s Pathway Plan Review prior to their 18th birthday chaired by their Independent Reviewing Officer. The young person’s Social Worker or Personal Adviser will ensure that all claims for Income Support (where the young person is in full-time education), Job Seeker’s Allowance and Housing Benefit are ready to be actioned when the young person reached 18.

A Staying Put Placement Agreement Meeting should take place before the young person’s 18th birthday so that they and the Staying Put carer can identify what their expectations of each other and the differences between the former foster placement and this new arrangement. This agreement should cover:

  • Preparation for independence;
  • Level of support to be provided by the carer;
  • Young person’s contributions;
  • Income and benefit claims;
  • Education, training and employment activities;
  • Health arrangements;
  • Friends and partners staying over and time spent staying away;
  • Issues related to younger foster children in placement including safeguarding;
  • Move-on plans.


Appendix 2: Financial Arrangements

1. Financial Arrangements - Young Person

Depending on their circumstances young people in a Staying Put arrangement can claim one or more of these benefits from their 18th birthday:

  1. Income Support under the ‘Relevant Education’ rules if they are ‘estranged’ from their family and are undertaking a full-time (16+ hours) further education or training course of a non-advanced level;
  2. Education Bursary for all full-time (16+ hours) further education courses and most training schemes paid by the college or training provider;
  3. Employment & Support Allowance where deemed ‘sick or disabled’ and those young people with a disability may also be in receipt of Personal Independence Payment;
  4. Jobseekers Allowance when registered unemployed and available for and actively seeking full-time employment.

Claiming a), b), c) or d) will not normally have any impact on the Staying Put carers’ own benefits should they be claimants themselves.

  • As an “excluded occupier on a license”, Housing Benefit claimed by the young person can considerably offset payments made to the carer by Children’s Services. The level paid depends on the type of accommodation in which they are living and level of rent which is set locally by the Local Rent Officer. It is important that Children’s Services and the Local Rent Officer show how the rent level has been agreed and how much is paid for support, utilities, wear and tear, housing management (carer support) and meals, (see Section 3, Legal and Policy Context).

From their income the young person will be responsible for buying their own clothes, toiletries, mobile phone contracts/top ups and other items previously covered by the fostering allowance paid to the carer. This encourages the young person to develop their budgeting skills.

When engaged in further education or training or actively seeking employment, the young person will contribute a weekly service charge (£20.00 pw for 2013/14) to help prepare them for independent living. This charge will also apply to young people in apprenticeships, and those on fluctuating or ‘zero’ hours contracts. For those in full-time the service charge will be calculated on a case by case basis. These contributions are set up as a standing order made directly to Brighton and Hove Children’s Services.

2. Financial Arrangements – Staying Put Carer

The Staying Put allowance paid to the carer is exclusively for the practical and emotional package of support that is being provided by that carer. Unlike the fostering allowance previously paid to that carer, it does not include any element to be given to or spent on the young person such as personal, clothing, travel and holiday allowances and costs associated with birthdays and Christmas or other religious festivals. These are provided from the young person’s income or by Children’s Services. 

The Staying Put allowance is exclusive of the service charge paid by the young person to Children’s Services. It is also exclusive of Housing Benefit which is also paid as income to Children’s Services. 

Where a Staying Put arrangement is proposed with an Independent Fostering Agency foster carer, early discussion with their agency will be required to determine the level of fee to be paid.

The advantages of direct payments to Children’s Services of Housing Benefit and young person’s service charge are:

  • The allowance paid to the carer remains consistent, thus reassuring for them and efficient in administration;
  • And it avoids potential difficulties in the relationship between carer and young person when a financial transaction is involved. This has been implemented following feedback from both parties.

3. Staying Put Carer Payments

These payments (2013-14 rates) cover ‘in-house’ foster care and supported lodgings carers assessed and approved under Fostering Regulations.

Standard Rate Allowance £179.00 pw
Higher Rate Allowance   £244.00 pw
Fee Element  
Carer with 2+ years service £59.00 pw
Carer with 5+ years service £86.00 pw

In most cases allowance paid will be £179.00 + £86.00 = £265.00 pw.

The Standard Rate Allowance will generally apply to all Staying Put arrangements which are in place to provide continuity and stability for the young person to complete their further education and their support needs will not usually be of a high level. In exceptional circumstances consideration will be given to paying the Higher Rate Allowance where the young person’s support needs are significantly increased due to:

  • A mild to moderate learning disability;
  • Enduring mental health needs;
  • Severe behavioural problems; and
  • Considerable extra work is therefore required by the carer to support the young person in the arrangement. In these cases agreement will be given by the Pod Team Manager, Support Through Care Team.

Rent levels currently negotiated and agreed with the Local Rent Officers for relevant councils, paid as Housing Benefit are £150 pw (Brighton and Hove CC and Lewes DC) and £138 pw (CenSus – the shared Revenues and Benefits for Adur, Horsham and Mid Sussex DC’s and Worthing BC) for these Staying Put arrangements within their local authority boundaries.

This Housing Benefit and young person’s service charge (currently £20.00 pw) are paid directly to Brighton and Hove Children’s Services and so neither affect the level of payment made to the carer.


Appendix 3: DWP & HMRC Frameworks

1. Department for Work & Pensions Framework

This framework is of relevance in considering entitlement to means tested benefits where a staying put arrangement applies.

The DWP “Staying Put” framework primarily applies to a young person remaining with their former foster carer on a familial basis, where no commercial arrangement applies and until they first leave the arrangement, or until the age of twenty-one, or until the end of an agreed programme of education or training being undertaken on the young person’s twenty-first birthday if they continuously lived in the arrangement.

The specific DWP legislation covering “Staying Put” arrangements highlights that:

  1. Where a young person continues to reside with their former foster carer after their eighteenth birthday on a non-commercial and familial basis; and
  2. Where the child was looked after immediately prior to their eighteenth birthday; and
  3. Where the payments are made by the local authority to the carer under section 23C of the Children Act 1989, the payments are disregarded in calculating the carers entitlement to means tested benefits.

When a commercial arrangement is made, i.e. any element of the cost of the arrangement comes from a source other than section 23C; the non-section 23C element will be taken into account in the calculation of the “Staying Put” carers own means tested benefit claim.

Additionally, the disregard is lost on the whole payment (section 23C and non-section 23C elements) when the young person first leaves the “Staying Put” arrangement, should the young person return to their former foster/“Staying Put” carer or, move to another carer after their eighteenth birthday.

See the benefits section regarding the application of benefit rules to the young person and their foster carer/former foster carer where a commercial arrangement applies.

2. HM Revenues & Customs Framework

HMRC have defined “Staying Put” more broadly than the DfE and DWP to ensure compatibility with legislation covering all four countries within the United Kingdom. This can be advantageous to both carers and young people where a young person wishes to return to the same or, another arrangement after they left their original “Staying Put” arrangement.

The term “Staying Put” (HMRC) is therefore used to define arrangements where:

  1. A young person was looked after immediately prior to their eighteenth birthday;
  2. The young person has a Pathway Plan;
  3. A proportion of the allowance paid to the “Staying Put” carer/s is paid by the Local Authority;
  4. “Staying Put” arrangements can extend until:
    • The young person reaches their twenty-first birthday; or
    • The young person completes the agreed programme of education or training being undertaken on their twenty-first birthday.

This broader HMRC definition allows for a young person to return to a Staying Put arrangement for example during a university vacation where all requirements above are met.

This definition can also mean that from the HMRC prospective any person can be defined as a Staying Put carer where the four criteria above are met. The carer does not need to be a registered foster carer or former foster carer. In circumstances where Children’s Services define a person as a Staying Put carer by paying them an allowance, the local authority needs to ensure the safeguarding arrangements are appropriate to meet the young person’s needs and that monitoring and support for the Staying Put carer is satisfactory.

3. HM Revenue and Customs (HMRC), Income Tax and National Insurance

The rules governing Income Tax and National Insurance issues for former foster carers changed on 6th April 2010 from “Adult Placement Care” arrangements to “Qualifying Care Relief Shared Lives Carers” arrangements. These rules extend the rules that apply to foster carers to Staying Put carers.

In order to qualify young people are required to share the Staying Put carer’s home and daily family life during the arrangement i.e. live as a member of the carer’s family.

Staying Put carers will be covered by the Qualifying Care Relief system where they provide an arrangement for a young person who was looked after immediately prior to their 18th birthday. This can continue until the young person reaches 21 or until they complete a programme of education or training. A young person below the age of 21 does not have to be engaged in education or training for the Qualifying Care Relief system to apply to their carers.

The Qualifying Care Relief system provides for Staying Put carers to earn up to a given amount without paying Income Tax or Class 4 National Insurance Contributions.  

The Income Tax free allowance consists of 2 elements:

  • A fixed amount of £10,000 per Staying Put household per year;
  • An additional amount of £250 per week per young person aged 18-21.

The tax free allowance is only available to households with 3 or fewer placements, however, foster care placements are excluded for this purpose and sibling groups are counted as 1 placement. Where there is more than one paid “Staying Put” carer in the household, the allowance is shared equally by both carers.

The tax free allowance only applies to the Staying Put carer’s income from caring. If they have income from other sources, they will pay tax on that income in the normal manner.  

If the carer’s income exceeds the allowance HMRC will treat the taxable profit from foster care or “Staying Put” care as earnings from self-employment for National Insurance Contributions purposes.

Staying Put carers may be able to claim Working Tax Credits as this is counted as “work” for this purpose. The carer’s taxable income is included in the total household income that is used to assess the amount of tax credits they are entitled to. So where the carer is paid less than their tax free allowance, their income from caring for tax credits purposes is also nil.

HMRC is aware that a number of Staying Put carers may not have registered for Class 2 National Insurance Contributions because they make little or no taxable profit. Staying Put is deemed as self-employment and as such carers should register as self-employed. All self-employed people aged 16 and over who are below State Pension age are liable and must register to pay these contributions. However, self-employed carers may be able to apply for Carers Credits which have replaced Home Responsibilities Protection, and those with low taxable profits may be able to apply for a Small Earnings Exemption.

To claim a Carers Credit, Staying Put carers must complete form CF411A available from HMRC.

If carers have not previously registered as self employed they can obtain further information by calling the Newly Self-employed Helpline on 0845 915 4515.

HMRC Help Sheet 236 provides advice on income tax and national insurance for foster carers, kinship carers, staying put carers, adult placement carers and parent and child arrangements all of which are deemed ‘Shared Lives Carers’ who are eligible for Qualifying Care Relief (see HM Revenue and Customs website).

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