Foster Care Allowance Victoria: Rates, Extras, and the Financial Reality

Money is one of the most searched-for topics among people considering fostering in Victoria — and one of the least honestly discussed in official materials. The brochures talk about "financial support." What they don't say is that Victoria has the lowest care allowance rates in the country, or that the allowance isn't designed to cover all costs, or that many carers end up subsidising placements from their own income.

None of this should put you off fostering. But walking in with unrealistic expectations is one of the most common reasons carers become disillusioned and leave the system. Here's the full picture.

The Care Allowance: What It Is

Victoria's Care Allowance is a fortnightly, non-taxable payment from the Department of Families, Fairness and Housing (DFFH) to help cover the day-to-day costs of caring for a child. It's not a wage. It doesn't replace lost income from reduced work hours. It's a contribution to expenses like food, clothing, activities, and basic needs.

The allowance is calculated based on two factors: the child's age and the level of support they require. Support levels (1–3 for standard foster care, with Level 4 and 5 for exceptional need) reflect the complexity of the placement — a child with significant trauma histories or medical needs attracts a higher rate.

2024–25 Care Allowance Rates

The following rates are the current DFFH scheduled amounts for Victoria:

Levels are assigned according to the child's assessed support needs. Ask the agency how it determines the level for a proposed placement.

Higher-Level Allowances

For children with exceptional medical, behavioural, or disability-related needs, two additional levels exist:

• Level 4: $1,211.02 per fortnight (regardless of age)
• Level 5: $1,864.09 per fortnight (regardless of age)

These rates may apply where a child's needs are formally assessed as requiring intensive support. Ask the agency what training, experience, and assessment criteria apply to higher-level placements.

Additional Payments and Grants

Beyond the base Care Allowance, Victoria provides several supplementary payments:

School Attendance Allowance — An annual payment to assist with school fees, uniforms, and books. The amount ranges from approximately $411 to $617 per year depending on the child's age and school stage.

New Placement Loading — A one-off payment of $72.71 (at Level 1) when a child first arrives in your care, to help cover initial costs like bedding, clothing, or car seat hire.

Specific Medical or Equipment Needs — For children with diagnosed medical conditions or disabilities, ask your agency and DFFH what additional support may be available for items not covered by other funding. These are considered case by case.

Respite Care Allowance — If you're considering respite fostering — a lower-commitment entry point — ask the agency how payments and eligible costs are handled for the period of care.

How Care Allowances Interact with Centrelink and Tax

This is important to get right before you apply.

The Care Allowance is not taxable income. The research describes it as non-taxable and not income for Centrelink purposes. Ask a tax adviser how it should be treated in your own return and household circumstances.

The Care Allowance is not treated as Centrelink income according to the research. Family Tax Benefit and other payment eligibility still depends on the applicable Services Australia rules and your circumstances.

Family Tax Benefit eligibility — If a child has been in your long-term care for an extended period, you may be eligible to claim Family Tax Benefit Part A and Part B for that child. This is separate from the Care Allowance and worth checking with Services Australia if you move into a long-term or permanent arrangement.

The allowance is described in the research as non-taxable and not income for tax purposes. Ask a tax adviser how any expenses or deductions should be treated in your circumstances.

The Real Financial Picture

The FCAV — the peak body for Victorian foster carers — has publicly noted that Victoria's care allowance rates are the lowest in the country. When you run the numbers against the actual cost of raising a child (including food, clothing, transport to school and medical appointments, activities, and incidentals), many carers report that Level 1 placements do not fully cover costs and that they subsidise some expenses from their own money.

The allowance can therefore leave a gap between the scheduled reimbursement and the actual cost of care.

What this means practically:

• Financial stability is a genuine pre-requisite. The assessment process verifies that you have sufficient income to support your household independently. If you're already stretching your household budget, fostering at Level 1 will create financial stress.
• Workplace flexibility matters. Many carers reduce to part-time work after accepting placements. The Care Allowance won't replace a full salary. Build this into your planning.
• Higher support levels help. If you're able to take on placements with children who have more complex needs — which requires experience and additional training — the allowance rates at Level 3, 4, and 5 are more reflective of actual costs.

What Carers Consistently Wish They'd Known

People who've been through the Victorian system regularly raise a few financial points that the official materials don't address clearly:

First, there's often a gap between when a child arrives and when the first allowance payment is processed. Having a float of a few hundred dollars available when a new placement begins is practical rather than paranoid.

Second, school holiday periods are disproportionately expensive. Activities, childcare alternatives, and day programs for children who need structure all cost money that the school attendance allowance doesn't cover. Some agencies have discretionary funds for this — but you have to ask.

Third, if you're caring for a child with an NDIS plan, navigating the intersection of NDIS funding and DFFH support can be complicated and slow. Your CSO support worker should be able to help, but it's worth understanding that delays are common.

A clear financial picture before your first placement removes one of the biggest sources of early-stage carer attrition. The Victoria Foster Care Guide includes a worked example of typical monthly costs against allowance rates, plus guidance on accessing additional supports through your CSO and the FCAV.

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