How is kinship care financial support calculated?

The amount of kinship care financial support a carer receives is worked out by applying the relevant local authority or devolved administration policy to the child’s legal status, assessed needs and the costs of providing care. The calculation may produce a regular allowance, one-off payments, help with specific expenses, or a combination of these.

The legal arrangement comes first. A child living with a relative or family friend may be:

• looked after by the local authority and placed with an approved kinship foster carer;
• subject to a special guardianship order;
• living with a relative under a child arrangements order; or
• living in an informal kinship arrangement without a court order or local authority placement.

These arrangements have different rules. An approved kinship foster carer will generally be assessed under the fostering allowance framework, whereas support connected with a special guardianship order or child arrangements order may involve a separate financial assessment. Informal arrangements do not automatically qualify for the same payments, although other help may be available depending on the circumstances.

The child’s needs are then considered. The assessment may look at the child’s age, health, disability, education, emotional wellbeing and any additional supervision they require. It can also take account of travel to school or contact, specialist equipment, clothing, activities, childcare and costs linked to maintaining important family relationships. A child who has complex needs or requires more care may therefore attract additional support compared with a child whose everyday needs are more straightforward.

Allowances usually reflect the cost of day-to-day care. Depending on the arrangement, the calculation may include money for food, clothing, personal items, household costs, transport and activities. Some schemes also include an element intended to recognise the carer’s time and responsibility, while others deal with this differently. The local authority should explain what each part of the payment is intended to cover rather than providing an unexplained total.

One-off and exceptional costs may be assessed separately. Initial expenditure can include furniture, bedding, safety equipment, clothing, school items or adapting part of the home. There may also be separate consideration of legal costs, travel, contact arrangements, therapeutic support or other costs arising from the placement. These payments are not necessarily included in the regular allowance, so a carer should ask how unusual or setup expenses are claimed and what evidence is required.

Some forms of support involve a means assessment. For example, when financial support is connected with a special guardianship order, the authority may examine the household’s income, benefits, savings, regular outgoings and other financial resources. It may also consider whether the child receives income or benefits in their own right. The purpose is to assess the household’s financial position and the additional cost of caring for the child; it is not simply a calculation based on earnings alone.

For an approved kinship foster placement, the fostering allowance is generally linked to the child’s placement and the applicable fostering policy rather than being calculated in the same way as a means-tested household benefit. However, the exact payment structure and any additions should be confirmed with the responsible authority. A carer’s benefits, tax position and other income can also affect their overall finances even where they do not change the underlying allowance.

Local policy makes a practical difference. Authorities may use different allowance rates, assessment forms, eligibility rules and payment schedules. The relevant policy may also depend on whether the child is placed by children’s services, whether a court order is being considered, and whether the carer lives in a different authority from the one responsible for the child. In Scotland, Wales and Northern Ireland, the governing arrangements can differ from those in England, so advice should be based on the nation and authority involved.

A typical assessment process involves:

• confirming the child’s legal status and which organisation is responsible for the placement or order;
• identifying the child’s ordinary and additional care needs;
• recording the costs of meeting those needs and any one-off expenses;
• completing a financial assessment where the relevant scheme requires one;
• applying the authority’s policy, including any standard allowance or child-specific additions; and
• setting out the decision, payment amount, start date and review arrangements in writing.

The calculation should be revisited if the child’s needs change, the legal arrangement changes, a significant expense arises or the household’s circumstances alter in a way that the relevant policy takes into account. Reviews may also occur as part of the authority’s normal support process. A review does not necessarily mean that payments will increase; it is intended to check whether the existing arrangement remains appropriate.

Before accepting a proposed amount, ask for a written breakdown showing the policy used, the factors considered, any deductions or assessed contribution, and which costs are included or excluded. If information has been overlooked, provide relevant evidence and request a reconsideration through the authority’s complaints, review or appeal process. A kinship carer can also seek independent advice about benefits, tax and legal orders, because these issues may affect the household’s total financial support separately from the kinship payment itself.