In the Report of the Special Commission of Inquiry into Child Protection in New South Wales, Recommendation 16.9 states: ‘Carer allowances should be reviewed periodically by an independent body and should more closely reflect the actual costs to the carer of providing care, according to the varying categories of need’ (Wood, 2008, p. 689). In 2000, estimates of the costs of foster children were developed (the Foster Care Estimates) by an ‘independent body’, the Social Policy Research Centre (SPRC). Using a budget standards approach, estimates representing the ‘basic’ subsidy were based on the costs of children not in care and adjusted to more closely reflect the day-to-day cost of fostering children in statutory care. Since 2000, the estimates have been updated annually (using the Consumer Price Index). This article examines the changes to levels of allowances for statutory foster and kinship carers in all Australian jurisdictions over the period 2000–2009. It argues that the use of the internationally recognised budget standards approach to estimate ‘actual costs to carers’ has been accepted by government and more than meets the requirements of Wood's Recommendation 16.9.