Costs and Compensation of Being a Foster Parent in Ontario

 Quick Reference

Are Foster Parents in Ontario Compensated?

Foster parents in Ontario receive financial support through a daily allowance called a per diem. The per diem is designed to cover the cost of raising a child in care, not to serve as personal income.

At Safe Harbours, we provide $75–$90 per day for each child placed in your home, depending on the child’s specific care needs and daily support requirements. This amount is among the highest per diems in Canada and ensures that every child’s essential needs are met consistently.

If you are financially stable and ready to take the next step, you can start your application to become a foster parent with our team.

What Is a Per Diem and How Does It Work?

The per diem is a daily rate provided for each foster child to cover their everyday living costs. Paid directly to foster parents for every day a child is in their care, the per diem ensures children have access to nutritious food, quality clothing, hygiene essentials, and enriching social activities.

What the Per Diem Covers:

• Food & Groceries: Balanced meals and snacks meeting dietary needs.
• Clothing: Seasonal wear, footwear, and personal attire.
• Hygiene Products: Personal care items and toiletries.
• Recreational Activities: Sports, hobbies, school trips, and extracurriculars.
• Household Contribution: A proportional share of utilities, rent, and household operational expenses.

Exceptional Costs That Are Reimbursed Separately:

Some expenses fall outside the standard daily per diem and are reimbursed separately with prior approval:

• Medical Expenses: Prescription medications, medical devices, or clinical therapies.
• Travel Expenses: Pre-approved mileage beyond 200 kilometers per month.
• Specialized Clinical Services: Psychological assessments or specialized counseling.

What Is Not Covered:

Daycare costs are generally not covered unless exceptional circumstances apply. Property upgrades or home renovations (such as pool fencing, staircase alterations, or finishing basements) are also the sole financial responsibility of the homeowner or tenant.

Tax Considerations: Is the Per Diem Income?

The per diem you receive as a foster parent is not considered taxable income in Canada.

A. Official Canada Revenue Agency (CRA) Guidance

Under Paragraph 81(1)(h) of the Income Tax Act (CRA), social assistance payments made to foster caregivers as reimbursement for the care and upkeep of foster children are explicitly excluded from income computation. Because these funds are non-taxable reimbursements, you do not report your per diem allowances on your annual Canadian tax return.

If you are exploring long-term permanency options, understanding how foster care and adoption differ can clarify how financial support and legal status evolve across different pathways.

B. Canada Child Benefit (CCB)

Foster parents generally do not receive the Canada Child Benefit (CCB) for children in care. Because Children’s Aid Societies and licensed foster care agencies maintain financial responsibility and issue monthly per diems/Children’s Special Allowances (CSA), the primary caregiver cannot claim standard CCB payments for a foster child.

C. GST/HST Credit & Ontario Trillium Benefit

Because foster per diems are entirely tax-exempt under Paragraph 81(1)(h), these allowances do not increase your net family income. Consequently, receiving a foster per diem will not reduce your eligibility for income-tested provincial and federal benefits such as the GST/HST Credit or the Ontario Trillium Benefit.

D. Mortgage & Loan Qualification

Financial institutions and mortgage lenders view foster per diems as tax-free expense reimbursements rather than guaranteed employment income. As a result, standard lenders typically will not count foster per diems toward debt-to-income ratios when qualifying for personal loans, car financing, or home mortgages.

Why Financial Stability Outside the Per Diem Matters

Fostering requires that you already maintain the financial means to support your own household. The per diem is intended strictly to cover the child’s living needs, not to pay your rent, existing bills, or personal mortgage obligations.

Safe Harbours reviews each applicant’s financial situation carefully to verify independent stability before approval. We assess income consistency and financial obligations to ensure that home environments remain stable and free from external financial stress.

Money vs. Motivation in Fostering

Financial compensation provides essential relief so foster parents can focus on offering stability, safety, and care without experiencing personal financial strain. However, the decision to foster is driven by a commitment to helping children heal, grow, and thrive.

For families who later decide to provide a permanent home, learning how to adopt your foster child is often the natural continuation of this rewarding caregiving journey.