Can I Foster if I’m on Universal Credit?

Short answer: yes. You can foster while claiming Universal Credit (UC). Fostering allowances/fees are ignored when UC is worked out, and if you’re the main foster carer you’ll usually only need to attend occasional work-focused interviews rather than actively job-search while the child is in placement. You must still tell UC about your fostering payments and placements in your journal, and keep your claim up to date.

What Universal Credit does (and doesn’t) count

• Fostering payments are disregarded. UC has a set list of income it counts. Fostering allowances/fees are not on that list, so they are fully ignored when your award is calculated. You should still declare them in your journal, with a note that they’re fostering payments to be disregarded. This avoids them being mistaken for wages.
• The policy principle is long-standing: when UC was designed, DWP confirmed fostering payments “will not be taken into account as earnings or income.”

Bottom line: your UC amount is based on your family circumstances and any other income (employment, savings, etc.)—not your fostering allowance.

Work requirements when you’re fostering

UC sets “conditionality” (what you’re expected to do for your claim). For foster carers:

• If you’re a lone foster carer or the nominated lead carer in a couple, you’re generally required only to attend work-focused interviews while you’ve got a foster child placed—until that child turns 16. You’re not expected to job-search during that time.
• Between placements, lead/single foster carers get up to 8 weeks to find a new placement before full job-search is applied (as long as you show you intend to continue fostering).
• In exceptional cases (for example, where a 16–17 year-old has documented full-time care needs), the lead/single carer may stay on interview-only requirements until the placement ends/child turns 18.

Tip: make sure your claimant commitment reflects your caring role and any evidence from your agency/local authority about the child’s care needs.

Housing costs, spare rooms and the “bedroom tax”

If you get UC’s housing costs element (help with rent), the number of bedrooms you’re entitled to matters:

• Approved foster carers can be allowed one extra bedroom for fostering. Many councils and advice bodies recognise that this can also continue for up to 12 months between placements.
• Where the rules think you have “extra” bedrooms, UC can reduce the housing amount by 14% (one extra) or 25% (two or more)—but the foster-carer extra room usually prevents this for that one room.

If you’ve just been approved or a placement has ended, update your journal and tell your work coach/housing team so the extra bedroom rule is applied correctly. Some councils publish specific guidance for foster carers on UC housing—worth checking locally.

The benefit cap and carers

The benefit cap limits some households’ total benefits. You’re not affected by the cap if your UC includes a carer’s element (for caring 35+ hours for someone who gets a qualifying disability benefit) or if you’re receiving Carer’s Allowance. Many foster carers meet these conditions when caring for a disabled child.

Note: Carer’s Allowance can interact with UC (UC is reduced pound-for-pound by the Carer’s Allowance amount, but you gain the carer element) so always check your exact position with a benefits calculator or adviser.

What you must report to UC (and how to avoid snags)

UC requires you to report changes promptly so you’re paid the right amount:

• Tell UC when you’re approved as a foster carer, when a placement starts/ends, and about your housing/bedroom needs. Use your online journal and keep evidence (approval letter, placement agreement).
• Declare all fostering payments in the journal and state they are fostering payments to be disregarded. If they’re ever counted by mistake, ask your work coach to correct the record (this occasionally happens).
• Tell other benefit offices you receive fostering allowances (for example if you get Council Tax Reduction), as GOV.UK advises.

Other support you might claim alongside UC

• Disability benefits for your foster child: If the child meets criteria, you can claim DLA (or PIP for older teens). This doesn’t reduce your UC standard allowance and can unlock extra help (e.g., disabled child addition on UC).
• Carer’s element of UC: If you provide 35+ hours a week of care for someone getting a qualifying disability benefit, UC can add a carer’s element to your award (you don’t have to be paid Carer’s Allowance to get this element).
• Childcare costs element: Not typical for foster carers (as you aren’t treated as the child’s parent for UC child elements), but if you have your own children and meet the rules, UC can cover up to 85% of eligible childcare.

Tax vs benefits: why you’ll see different wording

You’ll sometimes read that foster carers are “self-employed”. That’s a tax position, not UC. For tax, HMRC uses Qualifying Care Relief (QCR): a fixed annual amount plus a weekly amount per child that’s tax-free. It means many carers pay little or no income tax on fostering payments—separate from UC, which ignores those payments entirely.

Practical scenarios

1) I’m on UC and just got approved to foster.
Tell UC (via your journal) that you’re an approved foster carer and may need an extra bedroom. If a child is placed, add the placement date. Your allowances won’t reduce UC, and if you’re the lead carer you’ll normally move to work-focused interviews only while caring.

2) My placement ended last week—do I have to job-search immediately?
UC gives up to 8 weeks between placements (if you intend to continue fostering) before full job-search kicks in. Keep your journal updated and be ready to show evidence from your agency.

3) I care for a disabled foster child. Can UC add a carers amount?
Yes—if you provide 35+ hours of care and the young person gets a qualifying disability benefit, you can get the carer’s element within UC. This also exempts you from the benefit cap.

4) The system counted my fostering payments as earnings. What now?
Message your work coach and reference DWP guidance that fostering payments are fully disregarded for UC. Ask for a correction and backdated adjustment if needed.

Quick checklist for UC claimants who foster

1. Journal notes:
   • “I am an approved foster carer with [agency/LA]. Fostering payments are disregarded for UC.”
   • Add placement start/end dates and any evidence (approval letter/placement agreement).
2. Claimant commitment:
   • If you’re the lead/single carer, ensure it reflects interview-only requirements while the child is in placement (to age 16), or any exceptional needs.
3. Housing element:
   • Ask for the extra bedroom allowance and keep it updated between placements (many areas allow up to 12 months).
4. Carer support:
   • If relevant, apply for UC carer’s element and/or Carer’s Allowance; consider how they interact and the benefit cap exemption.
5. When in doubt:
   • Use a reputable benefits calculator or local advice agency (Citizens Advice, Turn2us).

Key takeaways

• Yes, you can foster on UC. Your fostering allowance does not reduce your UC.
• If you’re the lead carer, you’ll typically have interview-only requirements until the child is 16; there’s an 8-week easement between placements.
• Housing costs: you can be allowed one extra bedroom (often for up to 12 months between placements).
• Declare everything, but tag payments as fostering so they’re disregarded.
• Caring for a disabled child? The carer’s element can be added to UC and exempts you from the benefit cap.