Government reveals more info about kinship financial allowances pilot

The Department for Education (DfE) has launched an expression of interest for local authorities to participate in the long-awaited pilot of a financial allowance for kinship carers on 17 June, following the government’s Spending Review.

The pilot project or ‘trial’ will provide a financial allowance for eligible kinship carers in up to 10 local authority areas in England, equivalent to the fostering national minimum allowance (NMA).

The last government originally committed to a trial of financial allowances for kinship carers in the National Kinship Care Strategy in December 2023. In October 2024, the government reaffirmed a commitment and said it would invest £40 million to support kinship carers in England by “trialling a new kinship allowance in up to 10 local authorities.”

The government’s rationale for a pilot – rather than the universal introduction of allowances as we’ve repeatedly called for – is that it wants to test whether providing financial support for kinship carers helps keep children with their families and out of the care system.

The pilot is for kinship carers caring for children up to the age of 18 who are subject to either:

• a special guardianship order (SGO); or
• a ‘lives with’ child arrangements order (CAO) and who would be ‘otherwise in care’.

Here is a full list of who is eligible, according to information provided by the Department for Education:

• Kinship carers who have obtained an SGO for the child in public law proceedings or private law proceedings.
• Kinship carers who have applied for an SGO through private law proceedings and have passed the first hearing dispute resolution appointment (FHDRA).
• Kinship carers who have obtained a ‘lives with’ CAO for the child in public law proceedings.
• Kinship carers who have obtained a ‘lives with’ CAO through private law proceedings – or who have applied for a ‘lives with’ CAO and have attended a FHDR meeting – where the interim or final ‘lives with CAO’ does not name a birth parent of the child subject to the Order and at least one of the following conditions apply to evidence the named child would be ‘otherwise in care’:

• 1. immediately before the kinship arrangement the child was ‘looked after’ by a local authority (e.g. via an interim care order or under section 20 of the Children Act 1989).
  2. immediately before the kinship arrangement the child was, or is still, under a child protection plan.
  3. the family court noted safeguarding concerns arising from the contents of a welfare report during private law proceedings.
  4. a Family Group Decision Making meeting was convened and a decision was taken for the child to live full-time with a named kinship carer; which is now happening.
  5. both parents of the child are dead; but before they died, at least one of them was caring for and living with the child.
  6. the child was abandoned by either or both of their parents and at least one of them was previously caring for and living with the child immediately before abandoning the child.
  7. either one or both parents of the child are imprisoned but immediately prior to that, the parent/s were previously caring for and living with the child.
  8. 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.

Kinship carers that do not hold or are not in the process of securing an SGO or a ‘lives with’ CAO and meet the above conditions, as well as ‘informal’ kinship carers – i.e. those without a legal order – will not qualify to receive a financial allowance under this pilot.

The pilot will take place in up to 10 local authority areas in England, but these have not yet been chosen. Local authorities have the opportunity to apply to the Department for Education to become a Kinship Allowance Pilot provider between now and 23:59 on 15 July 2025.

The government’s provisional timeline sets out that they will alert successful local authorities in late September 2025, with agreements drawn up in October 2025 and pilot delivery commencing in early November 2025.

Participating local authorities will be expected to communicate they have been selected for the pilot to eligible kinship carers in their area and to advertise and promote the allowance through their kinship local offer and other means. We will also share information when the pilot areas are announced so that you can get in touch with your local authority to find out more.

The Kinship Allowance Pilot is only open to applications from local authorities in England. It is funded and managed by the DfE who are responsible for children’s social care policy, including kinship care, in England. The Welsh Government makes decisions about investment in and reform to financial support for kinship carers in Wales.

We expect there may be some circumstances in which eligible kinship carers living in Wales can be supported through the pilot if the child they care for was previously looked after by a local authority in England. We are seeking further clarification from the DfE and will update this page soon.

The DfE will be supported by Foundations – the What Works Centre for Children and Families – in assessing and selecting local authorities through a two-stage selection process.

The first stage involves an assessment based on the added value the pilot would bring to the local authorities’ current offer. This is because the DfE wants to work with local authorities who are interested in improving their support for kinship carers but have not yet had the opportunity to do so, in order to understand the impact of improving financial support for kinship carers. Local authorities who already provide comprehensive packages of financial support are therefore unlikely to be considered.

All submissions with high or medium value added will move on to the second stage where the DfE will then use one of two processes dependent on the number of local authorities who apply, but where both seek to balance across regions and levels of deprivation.

The pilot will run for just over 3 years – between November 2025 and March 2029.

The Kinship Allowance Pilot payment will be paid at least in line with the fostering national minimum allowance (NMA). This ranges from £170 to £299 per week dependant on location and age of the child; further details can be found on GOV.UK. The allowance will be paid weekly to kinship carers.

The allowance in the pilot will not be means tested

It is common for any income from child benefit to be considered by local authorities when determining the amount paid to kinship carers who receive a financial allowance. The DfE has said they are working to refine the detail of how the allowance in the pilot will interact with other tax and social security benefits and further information will be made available to participating local authorities once selected. Learn more about financial support and benefits for kinship carers.

The DfE has said they are working to refine the detail of how the allowance will interact with other tax and social security benefits and further information will be made available to participating local authorities once selected.

Typically, financial allowances provided to special guardians or kinship carers with child arrangements orders are not considered income when calculating entitlement to means tested benefits, such as Universal Credit. Learn more about financial support and benefits for kinship carers.

You do not need to contact your local authority at the moment. All local authorities that are chosen to take part in the pilot will be in touch with eligible kinship carers when they know if they have been selected. We will also be in touch to let you know which areas have been chosen to take part in the pilot

If you are eligible to claim a financial allowance under the pilot, you are under no obligation to take the allowance. Eligible carers will be able to choose whether to make a claim to receive the allowance or not.

If you already receive an allowance, but at a rate less than the relevant fostering national minimum allowance (NMA), your allowance will increase to match it. If you receive an allowance that is higher than the NMA then local authorities are expected to maintain this if participating in the pilot.

We have asked the DfE for additional clarification on circumstances where eligible kinship carers continue to receive support from a participating local authority where their child was previously looked after but now live elsewhere. We will update this page in due course.

We understand the worry this may cause some kinship carers and we recognise the concern they will have for their finances going forward. The DfE have said decisions about future national rollout will be informed by the findings of the evaluation.

We will continue to push the government to commit to delivering a guaranteed financial allowance for all kinship families across England and for local authorities to pioneer enhanced financial support regardless of their participation in the pilot.

The DfE wants to understand the impact of improving financial support for kinship carers and to establish if this helps to minimise the risk of kinship placement breakdown, enables kinship families to consider arrangements outside of the care system, and subsequently alleviated cost pressures on local authorities.

The impact of the Kinship Allowance Pilot on local authorities, kinship carers and children in their care will be independently evaluated by Foundations – the What Works centre for Children & Families. Decisions about future rollout will be informed by the findings of the evaluation.