More brothers and sisters could now be spared the upheaval of being separated when placed into care thanks to increased tax relief for foster parents.

The change, announced in the Budget, increases the amount foster carers can earn from £10,000 to £18,140 without needing to pay any tax or National Insurance contributions.

After fostering 120 children over nearly three decades, Judith Hunter knows how important it is to try to keep siblings together and welcomed the change.

“If the foster carers have got a bit more money, maybe they can afford a bigger house so there is more space or better quality of life for the children,” she said.

“To just have somebody your own flesh and blood with you is fantastic and too often children are split up because there aren’t enough big placements for them.”

According to calculations by the National Fostering Group, roughly 99% of foster carers will not end up being taxed at all on their fostering income under the updated Qualifying Care Relief.

And foster carers who could previously only take on two siblings should now be able to take on three without being liable to pay tax.

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Chief executive of the organisation, Steve Christie, hopes it will attract more people into fostering.

“It’s great that the government has chosen to do something to improve the financial circumstances of foster carers in a time when there a 9000 shortfall of foster carers across the country.

“It’s especially important for foster carers that look after sibling groups. Those are the foster carers that pre these changes would probably end up paying tax.”

More than a third of children with a sibling end up being separated when placed in care.

But Sarah Thomas, director or services in England and Wales for the Fostering Network is not convinced it will help keep siblings together.

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“I think that the reason that we struggle to ensure that brothers and sisters live together in foster care is less about the tax relief that’s applied to it because it’s applied per child,” she said.

“This is more about the capacity and foster carers having houses with enough bedrooms and space to be able to raise large sibling groups and to keep them together.”

She thinks it will provide support for some foster families but not every child will benefit.

“If we want to introduce things that are going to have impacts for all, make a difference for children then we need to do something that covers everybody and ensures that everybody benefits.

“That would mean paying realistic allowances that cover the full cost of caring for the child.”

The government has also announced that additional weekly amounts of tax relief have been increased from £200 per child under 11 to £375 and for older children from £250 to £450.

In addition, Qualifying Care Relief will increase in line with consumer price index (CPI) inflation each year.