Foster Care Financial Support South Australia: Allowances, Grants, and Start-Up Costs

The most common financial question prospective foster carers in South Australia ask is a simple one: does the allowance cover what it actually costs to care for a child? The honest answer is: it covers the essentials for most standard placements, but not all costs, and understanding the gap upfront avoids both financial stress and false expectations.

Foster care allowances in SA are a reimbursement for the costs of caring for a child — not a salary, not an income, and not a benefit. The distinction matters practically and for taxation purposes.

The Base Fortnightly Allowance (Effective 1 July 2025)

The base allowance is determined by the child's age and paid fortnightly directly to the authorised carer by the DCP or the contracted agency.

These rates increase annually, typically on 1 July each year. Confirm current rates with the DCP or your agency at the time of placement, as figures change.

Special Needs Loadings

When a child in your care has assessed physical, intellectual, or behavioural complexities, an additional "loading" may be applied on top of the base rate. The loading is calculated as a percentage of the base rate.

Loadings are assessed by the DCP and are not automatic. If you believe the child in your care has needs that warrant a loading and one has not been applied, you can raise this with your caseworker and request a formal assessment. Carers who are not aware that loadings exist often miss out on support they are legitimately entitled to.

One-Off Payments

Placement Start-Up Payment

When a child first comes into your care, a one-off start-up payment is made to assist with immediate costs: bedding, clothing, car seat (where applicable), and other necessities.

This payment is made once per new placement. It does not recur if the same child leaves and returns. Confirm with your agency whether this is paid to you directly or managed through an agency account.

Ongoing Periodic Payments

Education Grant

Paid per school term, the education grant covers education-related costs such as school excursions, uniforms, and supplies.

This grant is paid in addition to the base allowance. For secondary school-aged children, the per-term payment is significant and should be tracked and used for its intended purpose.

Activity Grant

An annual payment of $112 (usually disbursed in August) to contribute to sports, music, hobby, or extracurricular costs for the child. This is not means-tested and does not depend on the child's assessed needs.

Centrelink Entitlements

Because foster care allowances are not classified as income under Australian tax law — they are a non-assessable reimbursement under ATO Taxation Determination TD2006/62 — they do not affect your eligibility for Centrelink payments. This means carers who receive foster care allowances do not have those amounts counted as income for:

• Family Tax Benefit (Part A and Part B)
• School Card (SA government concession for low-income families with school-age children)

Carers who are not currently receiving Family Tax Benefit should enquire whether the addition of a foster child to their household affects their eligibility. The DCP can provide a letter confirming the child is in your care, which Centrelink requires.

Is the Foster Care Allowance Taxable?

No. Under ATO Taxation Determination TD2006/62, payments received by authorised foster carers in Australia are non-assessable income and are not included in your tax return. This applies to the base allowance, loadings, and additional periodic payments.

Kinship carers who are not formally authorised but are receiving informal payments through the DCP should clarify their tax treatment with a tax adviser, as their circumstances may differ.

The NDIS and Foster Care

If the child in your care has a disability or a developmental delay that qualifies them for the National Disability Insurance Scheme (NDIS), they may be eligible for an NDIS plan that funds supports beyond what the DCP allowance covers. This can include:

• Therapeutic supports (speech pathology, occupational therapy, psychology)
• Assistive technology
• Personal care supports
• Community participation funding

The NDIS plan is managed by the NDIA, not the DCP. As the carer, you do not have the authority to apply for or manage an NDIS plan — that responsibility sits with the child's legal guardian (the Chief Executive of the DCP) and is administered through the child's case plan.

However, as the person with the most detailed knowledge of the child's daily needs, your observations are critical input into an NDIS planning process. If you believe a child in your care has unmet needs that could be funded through the NDIS and no NDIS plan is in place, raise this with your DCP caseworker and document your request in writing.

For a comprehensive look at the financial framework alongside the full assessment process, agency comparison, and carer rights under the Children and Young People (Safety) Act 2017, the South Australia Foster Care Guide brings all of this into a single reference.

What the Allowance Does Not Cover

This is the section agencies are least likely to explain clearly.

The base allowance is designed to cover the ordinary costs of caring for a child of the relevant age: food, clothing, basic healthcare, school supplies. It does not automatically cover:

• Specialised therapy or counselling not funded through the DCP case plan or NDIS. If a child needs psychological support and this is not in their case plan, it is not automatically funded. Push for it to be included in the plan.
• Transport costs for contact visits, particularly in regional SA where a single supervised contact visit can involve several hours of driving. Reimbursement arrangements vary by agency — confirm this before accepting a placement.
• Medical costs above Medicare — specialist appointments, dental, optical. Confirm with your caseworker what is covered by the DCP's health arrangements and what falls to you.
• School excursions and extracurricular costs beyond what the education and activity grants cover. For secondary school-aged children with active social and extracurricular lives, this gap can be material.
• Property damage caused by the child. While agencies may have limited provision for this, it is not comprehensively covered. Discuss this with your agency before the first placement.

The gap between the allowance and the actual cost of care is narrower for younger children in standard placements and wider for adolescents with complex needs. Special needs loadings exist precisely to address the higher end of this spectrum — knowing how to request and document the case for a loading is one of the most financially significant things a new carer can learn.

Before Your First Placement: Financial Checklist

• Confirm the current fortnightly rate for the age group you are authorised to care for
• Ask your agency how and when the start-up payment is made
• Confirm the process for claiming the education grant each term
• Ask about transport reimbursement arrangements for contact visits
• Understand what happens with the allowance if the child is in hospital or on an extended visit with birth family
• Review your home and car insurance policies — check whether a foster child in your care affects your coverage

Approaching foster care with financial clarity is not mercenary. It is what allows you to focus your energy on the child in your home, rather than spending it managing unexpected costs that could have been anticipated.

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