Government reveals more info about kinship financial allowances pilot

The Department for Education (DfE) has launched the long-awaited pilot of a financial allowance for kinship carers on the 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, equivalent to the fostering National Minimum Allowance (NMA). 

The last government originally announced a trial of financial allowances for kinship carers in the National Kinship Care Strategy which launched in December 2023. In October 2024, the government confirmed that it will 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 Department for Education states that the pilot is for kinship carers with a Special Guardianship Order (SGO) or a ‘lives with’ Child Arrangement Order (CAO) looking after children up to the age of 18 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 or ‘lives with’ CAO for the child in public law proceedings or private law proceedings. 

• Kinship carers who have applied for an SGO through private law and passed the first dispute hearing resolution appointment (FHDR). 

• Kinship carers who have obtained a ‘lives with’ CAO in private law, or have applied for a ‘lives with’ CAO and have attended a FHDR if the following conditions are met:  
  1. The interim or final “lives with CAO” does not name a birth parent of the child subject to the Order and 
  2. Immediately before the kinship placement the child was deemed to be a ‘looked after child’ by a local authority or; 
  3. Immediately before the kinship placement, the child was or is still under a child protection plan or; 
  4. The family court noted safeguarding concerns arising from the contents of a welfare report during the CAO application process. 

The Department for Education have acknowledged that often ‘lives with’ CAO’s are complex and have noted several exceptions to the above conditions. These exceptions are listed in the government’s Supporting guidance for local authorities (page 3) and will be reviewed on a case-by-case basis.

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

A kinship carer is any family member or friend who steps in to raise a child/ren who cannot live with their birth parents whether they have a legal order or not – you can read more about the types of kinship carers and the legal orders they may have here.

The pilot will take place in up to 10 local authority areas. From 17 June, local authorities can apply to be one of the 10 areas, with the final selection being made by the Department for Education in September 2025. Financial allowance payments to kinship carers will start in the 10 selected areas from November 2025.

According to the Government’s guidance document, the Department for Education 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 selection process will be assessed based on the added value the pilot will bring to the local authorities’ current offer and will be categorised into high medium and low value added. All submissions with high or medium value added will move on to the second stage where the department will then use a random selection process to ensure fairness.

The DfE have set out a provisional timeline setting out when local authorities will find out if they have been selected for the trial. It is expected that DfE will alert successful local authorities in late September 2025, with agreements drawn up in October 2025, and pilot delivery commencing in early November 2025.

Local authorities will need to communicate they have been selected for the pilot to kinship carers in their area. This may be done directly by post or email, or via their website. We will also share information when the pilot areas are announced. 

The Department for Education have announced that the pilot will run for just over 3 years – between November 2025 and March 2029.

Payments to kinship carers will start from November 2025 when the pilot commences.

We have asked the Department for Education for clarification on this, as there is no mention of means testing in the supporting guidance documentation.

The kinship allowance pilot payment will be paid in line with national minimum fostering allowance. This ranges between £170- £299 dependant on the region and age of the child. Details can be found on the government’s website here.

The allowance will be paid weekly to kinship carers. We do not have information on how it will be paid.

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’re selected and when they’re ready to make payments. We will also be in touch to let you know which areas have been chosen to take part in the pilot.

We have asked the Department for Education for clarification on this, as there is no mention of whether the kinship allowance pilot will impact benefits in the supporting guidance documentation. 

If you are eligible to claim financial allowances 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 national minimum fostering allowance, your allowance will increase to match it. If you receive an allowance that is higher than the national minimum foster allowance this will continue to be paid at this level.

We understand the worry this may cause some kinship carers and we recognise the concern they will have for their finances going forward. We have asked the government for further clarification on this. 

Kinship will keep campaigning for the government to commit to a guaranteed financial allowance for all kinship families across England.

If your local authority is not chosen or does not take part in the pilot, unfortunately you won’t receive a financial allowance from the pilot.  

If you would like to find out more about other financial support and what may be available to you, please take a look at the information here. 

The Department for Education wants to understand the impact of improving financial support for kinship carers and ultimately understand if paying an allowance to cover certain costs – like supporting a child to settle into a new home with relatives – can help increase the number of children taken in by family members and friends, and reduce the number of children in, and cost of, local authority care. 

The Department want to be able to demonstrate the impact of scaling the pilot from (up to) 10 local authorities to nationally. The pilot will inform the decision making about any future rollout of this policy to more kind, and share learnings on what works well. 

The impact of the Kinship Allowance pilot on local authorities, kinship carers and children in their care will be independently evaluated by Foundations – What Works centre for Children & Families. The evaluation will include three strands of research: an Impact Evaluation, an Implementation and Process Evaluation and a Cost Benefit Analysis.