On this page

Some benefits and tax credits rules have special rules for kinship carers. See also Universal credit and kinship carers for more details of the universal credit rules, and Scottish child payment and kinship carers for the Scottish child payment rules.

Firstly, it is important to know whether the child who is living with a kinship carer is ‘looked after’ by the local authority or not. 

What is kinship care?

Where a child is not able to live with their parents they sometimes go and live full-time with relatives or friends. This is often called ‘kinship care’. Sometimes this is a formal arrangement made through the courts, by the local authority or by the children’s hearing system, sometimes it is less formal and arranged within the family.

Looked after by the local authority or not?

Some kinship care arrangements are formalised by the courts, the local authority or the children’s hearing system, others are not. The basis for kinship care arrangements varies depending on the circumstances. It is very important to know whether or not a child in a kinship care situation is looked after by the local authority.

Whether the child is looked after or not will depend on how the arrangement has come about. This section explains the main routes into kinship care, and whether the child is a ‘looked after child’ or not.

Not looked after

  • An informal arrangement has been made by the family
  • A kinship care order (sometimes called a residence order) under section 11 of the Children (Scotland) Act 1995) has been granted in favour of the kinship carer.

 Looked after

  • The child is subject to a compulsory supervision order or interim compulsory supervision order under the Children’s Hearings (Scotland) Act 2011, which requires them to live with the kinship carer
  • The child is accommodated by a local authority under section 25 of the Children (Scotland) Act 1995
  • There is a permanence order under Part 2 of the Adoption and Children (Scotland) Act 2007 in respect of the child

Local authority payments to kinship carers

Many, but not all, kinship carers get regular payments from the local authority. If they do get a regular payment, usually called a ‘kinship care allowance’, these are likely to be made under section 22 of the Children (Scotland) Act 1995, section 50 of the Children Act 1975 or regulation 33 of the Looked After Children (Scotland) Regulations 2009 (sometimes referred to as section 110 of the Adoption and Children (Scotland) Act 2007).

Section 22 payments

Section 22 of the Children (Scotland) Act 1995 sets out the local authority’s duty to safeguard and promote the welfare of children in its area who are ‘in need’. Section 22 powers are often used to make occasional or short-term payments, but are also sometimes used to make regular payments. Section 22 payments can be made for a wide range of purposes and so, for the impact on benefits and tax credits, it can be important to know what the payment is for. 

Section 50 payments

Section 50 of the Children Act 1975 allows the local authority to make payments for the maintenance of a child who is under age 18 and who is living with a person other than their parent. Section 50 allows the local authority to make payments to kinship carers, but does not oblige it to do so.

Regulation 33 payments

Regulation 33 of the Looked After Children (Scotland) Regulations 2009 together with section 110 of the Adoption and Children (Scotland) Act 2007 allows the local authority to pay an allowance to kinship carers of looked after children (called ‘approved kinship carers’).

Kinship care allowances – Scottish Government guidance

There is an agreement between the Scottish Government and local authorities that certain kinship carers should get financial support at the same level as the local authority’s fostering allowance rate (not including fostering fees). The agreement covers:

  • Kinship carers of looked after children;
  • Kinship carers where the child is subject to a kinship care order under section 11 of the Children (Scotland) Act 1995 or the carer is the child’s guardian under section 7 of the Children (Scotland) Act 1995, and
    • the child was previously looked after by the local authority, or
    • the child is at risk of becoming looked after, or
    • the child was placed with the kinship carer by the local authority.

Scottish Government guidance suggests that local authorities deduct ‘child-related’ benefits to which the kinship carer is entitled, and that a foster carer would not get, from the amount of the allowance. Specifically, child benefit and child tax credit (although not the disability or severe disability element) should be deducted if the kinship carer is eligible for these benefits. Guardian’s allowance, if payable, should not be deducted.

Example

Betty cares for her eight year old grandson, Joe, and has been granted a kinship carer order. Before she got the kinship care order Joe was subject to a compulsory supervision order and was therefore ‘looked after’ by the local authority. Betty gets child benefit and child tax credit for Joe and this amounts to £103 a week. A foster carer would not get these benefits for a child in their care. The local authority where Betty lives pay a fostering allowance of £196 a week. The local authority deducts £103 from this amount and pays Betty £93 a week kinship care allowance.

If the child in kinship care is not looked after by the local authority, look at the first section below. If the child is looked after by the local authority, look at the second section.

Benefit rules

Child not looked after by the local authority

This section applies if the child is not a looked after child.

In this situation there are no special rules for kinship carers and they should be able to claim benefits for the child if they satisfy the normal rules. For example, a kinship carer may be able to claim child benefit. They may also be able to claim and increase for the child in universal credit or for kinship carers who do not come under the universal credit system, child tax credit and/or other means-tested benefits like housing benefit.

The main issues which may arise are:

  • priority between claimants if someone else is claiming benefits for the child;
  • delays in getting benefits sorted out;
  • the ‘two-child limit’; or
  • whether local authority payments (where any are made) affect benefits.

Priority between claimants

Child benefit

Only one claimant can get child benefit for a particular child. Often, when a child comes to live with a kinship carer someone else will be getting the child benefit.

To get child benefit the claimant must be responsible for the child. This usually, but not always, means that the child lives with the claimant. ‘Living with’ means that the child lives in the same house or residence and has a settled course of daily living there with the claimant.

Where there are competing claims for child benefit, the person with whom the child normally lives has priority. However, if someone else is getting child benefit for the child when a kinship carer makes their claim, the other person will usually retain priority over the kinship carer for three weeks after the kinship carer makes their claim. This means that the kinship carer will not normally become entitled to child benefit until three weeks after the week in which they claim. The only exception to this rule is where the other person gives up their entitlement at an earlier date.

Universal credit

If a kinship carer gets universal credit it should include a child element for the child/children they care for, as long as they count as being responsible for the child or children. This means that the child or children normally lives with the kinship carer. The kinship carer does not have to be getting child benefit for the child. See our factsheet Universal credit and kinship carers for more detailed information on universal credit.

Child tax credit and other benefits

Child tax credit (CTC), working tax credit, housing benefit, income support, income-based jobseeker’s allowance and income-related employment and support allowance are all being replaced by universal credit. These benefits are often referred to ‘legacy benefits’. Kinship carers may still be on one or more of these benefits while universal credit is being rolled out.

The most important of these for many kinship carers is CTC. A claimant should get CTC if the child ‘normally lives with' them. HM Revenue & Customs says this means that the child ‘regularly, usually, typically’ lives with the claimant. The claimant does not have to be getting child benefit for the child to be classed as responsible for them for CTC purposes.

Pension credit

Some pension credit claimants who are responsible for a child get an additional amount in their pension credit (instead of child tax credit). Being responsible for a child means the child normally lives with the kinship carer. The claimant does not have to be getting child benefit for the child.

Child disability payment

DLA for children has been replaced in Scotland by child disability payment (CDP). CDP is administered and paid by Social Security Scotland. A kinship carer can apply to Social Security Scotland to be appointee for the child’s CDP. The appointee receives the CDP on behalf of the child.

Carer's allowance and carer support payment

If the child gets CDP middle or highest rate care component, the kinship carer may be able to claim carer's allowance (CA) or carer support payment (CSP) in respect of them. Only one person can claim CA or CSP for a particular disabled person.

Delays

Delays in getting benefits sorted out can cause hardship for kinship carers. Here are some ideas which might help.

Financial help from the social work department

The social work department may be able to make payments to help the kinship carer continue to care for the child.

Interim payments of benefit/ short term advances

An interim payment of child benefit can be made where it seems that the claimant is or may be entitled to benefit and where, for example, the claimant has claimed correctly but it is not possible for the claim to be dealt with immediately. A repayable short-term advance of universal credit can be made where the kinship carer is waiting for universal credit to be paid.

There is more information about interim payments and short-term advances in CPAG’s Children’s Handbook Scotland.

Crisis grants

It may be possible to claim a crisis grant from the Scottish Welfare Fund to help with living expenses. The kinship carer should contact their local authority for more information.

Complaints procedure

Use the complaints procedure and consider involving the claimant’s MP in getting benefits and tax credits sorted out.

The ‘two child limit’ and kinship carers

A ‘two-child limit’ may affect families with a child or children born on or after 6 April 2017. This mainly affects universal credit and child tax credit. For many people it means that universal credit or child tax credit amounts will only be paid for two children, even if there are more than two children in the family. However, there are exceptions to this rule including for some kinship carers.

The two-child limit does not apply to children in kinship care if the kinship carer:

  • has a kinship care order under section 11 of the Children (Scotland) Act 1995;
  • is appointed as guardian under section 7 of the Children (Scotland) Act 1995;
  • is entitled to guardian’s allowance for the child/children;
  • one of the above applied before the child turned 16 and the kinship carer continues to care for the child;
  • took on the care of the child where otherwise it is likely that they would have been looked after by the local authority.

Example

Sally and Bob have one child already when they take on the care of their niece and nephew. They have kinship care orders in place for both children. They can get universal credit amounts for all three children. Two years later they have another baby and they are able to get universal credit for the baby as well because the two ‘kinship’ children are disregarded for the ‘two-child limit’.

Treatment of local authority payments

Local authority payments to kinship carers are disregarded for tax credits and means-tested benefits like universal credit and pension credit. 

Child looked after by the local authority

This section applies if the child is looked after by the local authority. The local authority may describe this as being an ‘approved kinship carer’.

It is important to know what type of payment the local authority is making and what it is for in order to advise the kinship carer properly about their benefits and tax credits.

Benefit rules for kinship carers of looked-after children

Child benefit

The kinship carer should usually be able to claim child benefit for the child they are caring for. The exception to this is where the local authority is making payments under regulation 33 of the Looked After Children (Scotland) Regulations 2009. In this situation it is likely that HM Revenue and Customs will decide that they are not entitled to child benefit.

Universal credit

If the child is looked after by the local authority the kinship carer will not be able to get a universal credit amount for the child.

See Kinship carers and universal credit for more detailed information.

Child tax credit and other benefits

Child tax credit (CTC), working tax credit, housing benefit for most people under pension age, income support, income-based jobseeker’s allowance and income-related employment and support allowance are all being replaced by universal credit. These benefits are often referred to ‘legacy benefits’. Kinship carers may still be on one or more of these benefits while universal credit is being rolled out. The most important of these for many kinship carers is CTC.

If a child is looked after by the local authority, but the local authority payment is not in respect of accommodation or maintenance, then the kinship carer should be able to get CTC for the child. A payment made under section 22 of the Children (Scotland) Act 1995 will often be for expenses other than accommodation or maintenance.

If the local authority payment is in respect of accommodation and/or maintenance, then the kinship carer will not be able to get CTC. A payment made under section 50 of the Children Act 1975 is, by definition, for maintenance and therefore a kinship carer who is getting a payment under section 50 of the Children Act 1975 will not be able to get CTC for the child they care for.

If the kinship carer is ‘approved’ by the local authority and is receiving a kinship care allowance they may be able to continue to get working tax credit as a self-employed carer.

There is more information on 'legacy benefits' for looked after children in CPAG’s Children’s Handbook Scotland.

Pension credit

Some pension credit claimants who are responsible for a child get an additional amount in their pension credit (instead of child tax credit). A kinship carer will not get this additional amount for a looked after child unless they have legal parental responsibilities for the child.

Child disability payment

DLA for children has been replaced in Scotland by child disability payment (CDP). CDP is administered and paid by Social Security Scotland. A kinship carer can apply to Social Security Scotland to be appointee for the child’s CDP. The appointee receives the CDP on behalf of the child.

Carer's allowance and carer support payment

If the child gets CDP middle or highest rate care component, the kinship carer may be able to claim carer's allowance (CA) or carer support payment (CSP) in respect of them. Only one person can claim CA or CSP for a particular disabled person.

Treatment of local authority payments

Local authority payments to kinship carers are disregarded for tax credits and means-tested benefits like universal credit and pension credit.