Like most LAs we have two basic types of foster carers - those who only receive the boarding out allowance and those who receive this plus a fee or reward element. The latter cannot take up other employment and the fee is quite clearly intended as a substitute for earnings they could otherwise achieve elswhere.

The IS regs do not distinguish between the types of foster carers. Single carers can claim IS (Sch 1B para 2)and income from the LA for formal fostering is disregarded, including by ommission any reward element (Sch 9 para 26).

On the other hand, the IR guidance on the income tax treatment of fostering payments says that they regard foster carers as being self employed with nil earnings provided that the income from the LA, including any reward element, is below the qualifying amount. The guidance specifically says that carers can claim WTC, presumably on the basis of 30+ hours and nil income normally.

On the face of it, those carers who could get either IS or WTC can choose between the two, depending on which gave them the most income. Carers who would benefit from the WTC choice include carers with savings or other income, single carers with their own children, and carers with partners on IB with or without their own children.

Knowing what they say about things that look too good to be true, am I missing something? Any experience, knowledge of CDs or internal DWP/IS guidance?

Any thoughts on foster carers, fee paid or otherwise, claiming IB or carer's allowance? After all the DWP does not appear to treat them as working although the IR does.

CIB/1262/01

Commissioner Rowland,18/12/01

fostering does not count as work for Incapacity

I wanted to alert you though to par 13976 and 13977 of the Decision Maker Guide (I think it may have been added quite recently ? ) these paragraphs are in Volume 3 the Incapacity section under the heading "Work that includes caring and domestic tasks"
13976 states : Placement of difficult , retarded (sic) or sick children will attract an allowance as well as expenses in recognition of the extra supervision , education or care necessary. The allowance can be regarded as being for work over and above the normal domestic tasks in a client's home , and is subject to the prescribed earnings and hours limit.

13977 : If the earnings do not exceed the weekly limit , the hours attributable to the work element of the placement should be estimated to see if these are less than 16.