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Local authorities invited to join kinship financial allowances pilot
The Kinship Financial Allowance Pilot is a national government scheme to test providing kinship carers with a financial allowance to cover some of the costs of care, encouraging more family members or friends to come forward.
Today, 17th June 2025, the Government has invited local authorities to express an interest in joining the Kinship Financial Allowance Pilot.
Kinship care is when relatives or friends who step in to raise children when their parents cannot.
Announced in the Autumn 2024 Budget, the pilot will enable up to 10 areas to test providing kinship carers with allowances to cover some of the costs of care, encouraging more family members or friends to come forward.
Eligible kinship carers will receive a weekly, non-means tested financial allowance which will be paid at a rate equivalent to the national minimum fostering allowance.
The allowance will be offered to kinship carers raising a child up to the age of 18, who is the subject of either:
- a special guardianship order (SGO)
- or a child arrangements order that specifies the primary residence of the child and who they will live with (‘lives with CAO’) and who would have otherwise been in care.
Cathy Ashley, Chief Executive of Family Rights Group, said:
“Family Rights Group is pleased to see the Kinship Financial Allowance pilot is finally progressing, and that Government has recognised that improving financial support for kinship families must be a priority.
“Too many relatives and friends stepping in for children who would otherwise be in the care system with strangers, often at short notice, face financial hardship. Currently most kinship families have to give up work or reduce their hours to take on the care of the children, forcing them into poverty.
“We encourage local authorities to apply to become one of the 10 pilot areas. Alongside the pilot, all authorities need to be working with families and the sector in designing their new kinship local offer.
“Nevertheless, we are concerned that some children will fall through the cracks in pilot eligibility. We fear this will disproportionately affect children from Black and minoritised communities who are more likely to be in informal kinship care arrangements. Moreover, in the vast majority of the country, outside of the pilot areas, kinship families will continue to face variable financial support and often unfair practice. For example, some local authority policies and calculations do not adequately account for disability and risk placing disabled kinship carers and disabled children at a particular disadvantage.
“There is an urgent need, alongside the pilot, to improve financial support across the country and we will continue to press the Government to address that.”
How much is the Kinship Financial Allowance?
Eligible kinship carers will receive a weekly, non-means tested financial allowance which will be paid at a rate equivalent to the national minimum fostering allowance. The allowance will vary by the age of the child and their region of residence.
Which families will be eligible for the Kinship Financial Allowance Pilot?
The allowance will be offered to kinship carers raising a child up to the age of 18, who is the subject of either:
- a special guardianship order (SGO)
- or a child arrangements order that specifies the primary residence of the child and who they will live with (‘lives with CAO’) and who would have otherwise been in care.
This will include certain situations where an application for one of the above orders is being pursued through private law proceedings. For example:
- Kinship carers who have applied for a SGO through private law proceedings and have passed the First Hearing Dispute Resolution Appointment (FHDRA).
- Kinship carers who have applied for a “lives with” CAO and have attended a FHDR meeting, if one the following conditions apply.
For children subject to a ‘lives with CAO’, or where an application has been made as above, there are additional requirements to show the child ‘would have otherwise been in care’. This includes:
- immediately prior to the kinship care arrangement, the child was looked after by a local authority. This can be either via an interim care order or an arrangement under section 20 of the Children Act 1989.
- Immediately prior to the kinship arrangement, the child was or is still under a child protection plan.
- For ‘lives with’ child arrangements orders made in private law proceedings, the court ‘has noted safeguarding concerns arising from the contents of a welfare report’.
- A Family Group Decision Making meeting was convened and a decision was taken for the child named under the “lives with” CAO to live full-time with a named kinship carer; which is now happening.
- Both parents of the child subject to the “lives with” CAO are dead; but before they died, at least one of them was caring for and living with the child named under the “lives with” CAO.
- The child subject to the “lives with” CAO was abandoned by either or both of their parents and at least one of them was previously caring for and living with the child subject to the “lives with” CAO immediately before abandoning the child.
- Either one or both parents of the child subject to the “lives with” CAO are imprisoned but immediately prior to that, the parent/s were previously caring for and living with the child.
- Either one or both parents have been detained in hospital pursuant to the Mental Health Act 1983 but they were previously caring for and living with the child immediately prior to being detained.
Which local authorities are eligible to apply to join the Kinship Financial Allowance Pilot?
Local authorities who meet the following criteria will be excluded:
- The local authority has been issued a section 114 notice that is still in effect
- The local authority’s current offer already matches the pilot offer
Any other local authorities are eligible to apply.
When will the Kinship Financial Allowance Pilot start?
Local authorities can express an interest in being part of the Kinship Financial Allowance Pilot between 17th June and 15th July.
Local authorities will be notified if they have been successful in September 2025.
The pilot will start in November 2025 and run until March 2029.
How many local authorities will be involved in the Kinship Financial Allowance Pilot?
The Government previously announced that up to 10 local authorities will be selected.
How will the Kinship Financial Allowance Pilot be evaluated?
The Kinship Financial Allowance Pilot’s impact on local authorities, kinship carers and children in their care will be assessed via an independent evaluation. The Department for Education has worked with Foundations – the What Works Centre for Children and Families to identify a preferred supplier.
The full expression of interest guidance can be found here.
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