Foster carers receive first real payment increase in over 20 years

Thursday, 8 January 2026 

For the first time in over two decades, foster and kinship carers across NSW have received a 20 per cent increase to their care allowance, as part of the Minns Labor Government’s landmark reforms to strengthen support for carers and vulnerable children in out-of-home care (OOHC).

The tax-free allowance increase, which commenced from 1 January 2026, is designed to help carers manage rising cost of living pressures and support the children and young people in their care.

This increase will make a real difference in the day-to-day expenses of caring for children, with a carer of a typical 14-year-old to receive $4,576 more per year, and a carer of a typical 5-year-old to receive an additional $3,411 per year.

These payments are part of the Minns Labor Government’s landmark $1.2 billion child protection package to reform the child protection system and better support foster carers. Significant work has been undertaken to transform the recruitment, training and support provided for carers, with the first NSW OOHC Carer Strategy to be released early in 2026.

The Government is embarking on comprehensive child protection reforms to improve outcomes for children in care, with achievements to date including:

• banning unaccredited care providers from April 2025, ensuring safer care arrangements for children and young people in care 
• introducing paid foster leave for NSW Government employees
• establishing government-run Waratah Care Cottages to better support children and sibling groups who would otherwise be in emergency placements
• recruiting more than 300 family time workers, directly employing staff to keep children connected to their birth families.

We have restarted government recruitment of foster carers, after it was inexplicably stopped by the former government, leading to a chronic shortage of carers. 

Now, it has never been a better time to become a foster carer, with carers provided with meaningful training, financial and professional support. To learn more about becoming a foster or kinship carer, visit nsw.gov.au/fostercare.

This increase benefits all authorised carers receiving statutory care, supported care, guardianship or adoption allowances supported by either the Department of Communities and Justice or non-government organisations. To find out more, visit the NSW Government Community Services website.

Minister for Families and Communities Kate Washington said:

“When we came to government foster carers were telling me that they hadn’t felt valued in years. This increase to the foster care allowance is a powerful recognition of the vital work foster carers do every day across New South Wales providing safe and loving homes for the children who need it most.  

“We are undertaking significant reform of the child protection system, a critical part of which is looking after our foster carers better. We value the wonderful people who step up and become foster carers, and we will continue to support them so they can support the kids in their care.”

Secretary of the Department of Communities and Justice, Michael Tidball, said:

“Foster carers make a huge difference every single day. Their commitment and kindness help change the trajectory of children’s lives. We are making sure our carers have the support they need, and we are actively welcoming new carers from all backgrounds. If you have room in your heart and your home, please consider joining our foster care community.”