Looking after the family: a study of children looked after in kinship care in Scotland

Study commissioned by the Social Work Services Inspectorate, now the Social Work Inspection Agency.

9 Resourcing kinship care

How kinship care is supported financially is a theme that has permeated the international research and literature on this area of child welfare. A clear distinction is made in the literature between three groups:

  • foster carers
  • kinship carers who are looking after children where there is some kind of order
  • informal kinship carers who are looking after children without any state intervention

Research from the USA, for example, has reported consistently that kinship carers have lower incomes than foster carers but are also paid less money for looking after their kinship children (see Lernihan 2003 p. 189). The consensus from England, Northern and Southern Ireland is that formal kinship carers are generally paid less than the standard boarding out allowance for foster carers but at a rate above that to families on income support (Lernihan 2003; O'Brien 1999; Waterhouse and Brocklesby 1999; Laws 2001; Broad 2001). Broad, for example, found in one London borough that payments were made at around two and a half times above income support level, although, in special circumstances, amounts were higher (Broad, 2001, p. 39).

Experience in parts of the UK outwith Scotland also suggests that, while there is provision for allowances to be paid to kinship carers outside the benefits system, when relatives have legal responsibility for a child through a residence order, the allowance given may be means tested by local authorities or may be taken into account in calculating income support. This is unlike the fostering allowance payments made to foster carers on behalf of a foster child. These allowances are deemed to be for direct provision of clothing and for everyday care for the child. Some English authorities have circumvented the anomalies by making payments to families under the section of legislation which allows for one-off payments in cash or in kind to support children in need (Richards 2001).

The anomalies and muddle that are reported in the literature relate to the central dilemma surrounding kinship care. Along with the domain of assessing kinship carers, which was discussed in the previous chapter, deciding whether kinship families should be financially supported raises complex issues about where the boundary should lie between family obligations and state support. In the USA, justification for paying limited allowances to kinship carers has been linked to concern that generous allowances would act as a perverse incentive to parents to leave their children with carers in the long-term (Berrick et al. 1994; Link 1996). In this study, the head of children's services in one local authority told us that potential misuse of the system had occurred in the past in their local authority. As a result of this, they had abandoned their link carers' allowance scheme because it had led to false claims of residence and exploitation of the system by some families (verbal communication with the head of children's services). It must be stressed that there was no evidence whatsoever of this occurring among the 24 families interviewed in our study. On the contrary, as demonstrated in Chapter 6, carers were often continuing to care for children out of commitment to their long-term welfare at substantial financial costs to themselves.

A further issue identified in previous research, especially that from the USA, is whether any allowance should be time-limited, in order to ensure children are directed either towards reunification with their parents or towards permanent adoptive placements. Positive arguments have been put forward that such stringent permanency planning in kinship care is in the interests of children's well-being (Ainsworth and Maluccio 1998). The position reported in the UK is more flexible with different routes to permanence, with or without financial support (Thoburn 1994; Quality Protects 2001). There is evidence from at least two UK studies that the primary motive in transferring parental responsibility to kinship carers is to get families 'off the books' (Richards 2001; Hunt and Macleod 1999). This approach can create tensions between families and agencies, especially if any allowances are seen as an essential part of income required by a family in order to continue supporting the child (Hunt 2001).

Financial support of kinship care in the study and the survey

There is little known about the policies and practices of financial support of kinship care across Scotland. The five local authorities in the intensive study had five very different patterns of financial support for looked after kinship care children. These varied from:

  • carers being paid a basic fostering allowance that would be paid to stranger foster carers, supplemented by any one-off payments for special needs
  • carers being paid an allowance considerably less than the basic fostering allowance
  • carer's being given a one-off payment on demand

In the last case, as two of the grandparent kinship carers reported in Chapter 7, this could vary even within the same postcode area. In the one case, where the carer was approved as a foster carer, the family was supported at a higher level than the rest of the families in the study.

The survey showed that variation in patterns of financial support to kinship carers in the study was replicated across the country.

Within the 32 local authorities, two main routes to payment were reported with considerable variation within each. These were:

  • where carers are assessed and approved as foster carers
  • where carers are not approved as foster carers

Where carers are assessed and approved as foster carers

Kinship carers may be assessed as foster carers, which occurs normally if children are accommodated and placed within section 25 or 86 of the Children (Scotland) Act 1995 or are in emergency placements. Five authorities said they paid kinship carers the same allowance for the child as stranger foster carers would get. Although all but one deducted child benefit from their allowance. Two local authorities said they actively supported carers to claim child benefit.

Where kinship carers are not approved as foster carers

As shown in Chapter 2, the majority of children in kinship care are not accommodated but may be the subject of a supervision requirement with condition of residence with relatives. Or they may be on a section 11 parental responsibility order. There were two distinct rationales for the payment of kinship carers in this category. One related to the status of the carer, the other to the status of the child. The arguments against paying kinship carers the same as foster carers were more focused on the status of the carers.

Where the status of the carer was the basis of payment, a clear distinction was made between the roles and tasks of stranger foster carers and kinship carers. This was summarised by one authority as follows:

The task of caring for a child who is a relative or friend is different from that of resource foster carers who are caring for other people's children. Apart from the bonds created by blood and family relationships, related carers are not required to have the diverse skills required of foster carers who look after a variety of children with widely varying needs. Nor are they required to be involved in other tasks demanded of resource foster carers such as training, assessment, report writing and reviews.

It was argued by this authority and others that, because children were not looked after and accommodated, this meant that children were unlikely to make many special demands on their carers. Had they had really serious concerns about children, the local authority would have placed them with trained foster carers. This seemed a curious argument since clearly children were with their kin precisely because the state believed they were at risk of harm and needed to live away from their parents. A further argument was that kinship carers might not wish to be regarded as foster carers because they saw their task as one of family obligation. Consequently, they would not wish to be engaged in the full range of training and partnership working demanded of foster carers. It was also argued that many kinship carers might not meet the rigorous required standards for foster carers, which were 'exacting in terms of health, age and background'.

The alternative approach tended to be more focused on the status of the child but also argued for supporting the tough circumstances in which carers might find themselves.

First, there was a case, made by at least three local authorities, for natural justice. Parity between accommodated foster children and kinship care children placed on supervision orders was justified by the legal status of the children concerned. In both cases, these were 'looked after' children, clearly defined as such in the legislation. In both cases, there was statutory intervention which had led to the looked after status. In the case of the kinship care children, the social work department had been sufficiently concerned to intervene and seek a supervision order.

The second argument related to the first. While these were looked after children, without kinship care they might have become foster children. Some local authorities believed that locating children with kinship carers actively fulfilled the principle of 'minimum intervention' and prevented children from being formally accommodated. While many kinship carers would not wish to see their role as foster carers, many children might have similar needs to 'accommodated' children because of the experiences which had necessitated kinship care in the first place. Payments were given by these local authorities in recognition of this fact.

The third argument acknowledged that looking after children within extended families was not necessarily without its challenges, especially where residence had been transferred formally to extended family. Managing family relationships in order to promote children's welfare brought its own demands, which warranted recognition.

These three arguments were typified by one authority, who suggested:

Research indicates that kinship carers are a difficult group to define, and that their needs and attitudes towards intervention by social work services cannot be generalised. There is ambivalence about being regarded as foster carers and many do not accept that term to describe their role. In spite of this there is a recognised need to provide support, and not just on a financial basis, to families who are often coping with disturbed behaviour, disagreements within the family, and disputes over contact arrangements.

As might be expected, given the different rationales, there were complex patterns of payments to kinship carers both between and within local authorities.

Payments to kinship carers

Broadly, the payments of kinship carers fell into three categories which reflected the legislation under which children were placed. These were:

  • carers assessed as foster carers and paid the same range of allowances as foster carers
  • kinship carers paid the same basic fostering allowance as foster carers in all circumstances where children were looked after
  • kinship carers paid at a different rate from foster carers

Carers assessed and paid the same allowance as foster carers

As shown earlier, only a minority of carers had the status of foster carers. In the majority of these cases, although the authorities brought the assessments of kinship carers to fostering panels, the carers would not be expected to fulfil the same stringent criteria. With one exception, all local authorities where carers were assessed as foster carers were paid on the same basis as stranger foster carers. One exception made an interesting distinction between care by families and that by friends. Friends would be assessed, approved and paid as stranger foster carers but family were paid at a lower rate, which was twice the rate of income support. This decision had its origins historically in an attempt to make a stretched budget go further. One authority had just moved from a position of paying kinship carers 'approved as foster carers' 50% less than foster carers to an interim policy of paying both groups the same rate.

Kinship carers paid the same rate as foster carers in all circumstances where children were looked after

Twelve local authorities said they paid kinship carers the same basic fostering allowances as foster carers, irrespective of the legal route by which the child had become looked after. Five mentioned that they deducted child benefit or any other allowances to which stranger foster carers would not be entitled. Two authorities within this group said they had moved from a traditional position of paying kinship carers a lower, standard allowance. One authority had previously set this at one third of the fostering rate but had been influenced by a recent court case in England to change its policies.

Kinship carers paid a different rate from foster carers

Ten local authorities paid kinship carers a regular allowance at a rate that was different from the fostering allowance for children accommodated with their approved foster carers. This varied from 80% of the basic fostering allowance in one case to the most popular figure of around one third of the fostering allowance, mentioned by six local authorities. At least two authorities subtracted child benefit from this amount. Examples of what a payment of one third of the fostering allowance meant were provided by at least three authorities and two are included here. Payments tended to be defined by the age of the child. It can be seen that, were child benefit to be subtracted, the payment would be rather small. However, most authorities which operated within these parameters were also prepared to provide 'one-off payments' under section 22 of the Children (Scotland) Act 1995 for specific purposes, such as the purchase of bedding or additional clothing. The variation between these two authorities reflects variations that occur across Scotland.

Rates paid to kinship carers at one third rate of foster care at January 2004:

Authority A

Authority B

Child 1-4 yrs



Child 5-10 yrs



Child 11-15 yrs



Child 16+ yrs


no figure given

The issue of benefits legislation

Financial support to kinship carers is complicated considerably by the UK national system of transfer of child benefit from parents to kinship carers. This is an important issue that was identified by the Association of Directors of Social Work and The Fostering Network working group in 2003 (Association of Directors of Social Work and The Fostering Network 2003). It is an issue that has emerged as a source of stress and financial hardship in the intensive study. Not only does the system cause huge delays for carers waiting to receive transfer of child benefit, but it also puts strain on social work department budgets. Some resented being forced to take on the mantle of a benefits agency, even temporarily. This was an issue to which local authorities drew attention in the survey, and the following comment speaks for the majority:

The current state benefit system operates in a way that is often detrimental to kinship carers and places significant financial burdens on social work departments. At present, friends and family who offer to care for a child often have to wait eight weeks or more before they can claim child benefit or income support. This is further complicated and protracted if the birth parent is continuing to claim these benefits fraudulently. The social work department is often left to support the placement financially while these matters are resolved. A quicker mechanism for transferring entitlement to benefits and dealing with applications would be hugely beneficial.

A customised system of financial support

In just over half the authorities, what might be termed a customised model of financial support existed. This was based on a mixture of assessed need and requests for support from the placement. Payments to relatives and friends appear to vary considerably and include the following range, according to the legal categories of the kinship children:

  • full fostering allowance less child benefit (for accommodated children)
  • weekly guardianship allowance (for section 11 children)
  • weekly/monthly payments at a lower rate than fostering allowance plus additional payments for specific items, e.g. clothing (for children who were the subject of a supervision requirement)
  • no financial support (for children not looked after)

A minority of three authorities said their current position was not to make any regular payments to kinship carers for looked after children but to respond with occasional or one-off section 22 payments if carers approached them for help. In these cases, the justification for payment was that children were assessed as in need under section 22 of the Children (Scotland) Act. Typically, one authority said:

Financial assistance is not automatically paid to relative carers. Payments are made if the social worker is made aware that the relatives are needing assistance. If an allowance is required this is usually 80% of the fostering allowance minus the amount of child benefit. In other situations, one-off payments may be made to meet specific needs.

Another authority noted there could be considerable variation in the extent to which carers approached the authority for help. Furthermore, each claim was dependent on identified need as assessed individually by social workers. Clearly, access to payments might be serendipitous.

Nevertheless many authorities, irrespective of whether they used section 22 as a sole means of support for kinship carers or to supplement other regular payments, attempted to use payments creatively. This included help with essentials such as school uniforms as well as several large payments for items such as bedroom furniture. Payments were also used for after-school care, school trips and towards holidays.

In addition to cash, financial payments could be made in kind. One authority also had relaxed its service criteria 'to ensure that family, friends caring for children can access family centre and day care places that previously would not have been available to them'.

Budgets for financial support for kinship carers

Although regulations and guidance for the Children (Scotland ) Act 1995 (Scottish Office, Social Work Services Inspectorate 1997) suggests section 22 is used for one-off purposes, one authority made it clear that all their kinship placements were supported from the section 22 budget, including those who were paid a regular allowance.

As shown in Chapters 2 and 8, the majority of local authorities used section 50 of the 1975 Children Act, which allows for the support of a wide range of children looked after by adults other than their parents. It therefore, can be used to take children out of the looked after system. By far the majority of kinship care occurred where there was a supervision requirement or a residence order. In these cases, the supervision order was ended and often replaced with a section 11 parental responsibility order. The family continued to be supported from section 50 budget. In some cases, local authorities also paid legal fees for kinship carers to apply for a parental responsibility order. The source for this was unclear.

The need for some standardisation of supporting kinship care financially

The responses to the survey suggest that grappling with financial support for kinship carers is a major preoccupation among local authorities across Scotland. As the kinship carers
we interviewed clearly articulated, the outcome of a system which, in many authorities attempts to pay kinship carers as little as possible, was having a major effect on their ability to give the best to their family's children. The minority, who received a reasonable allowance commensurate with that given to foster carers were markedly better off (see Chapter 6).

There seems to be a real dilemma as to whether kinship carers should be treated as other families with children in need or whether they should have some defined status because of taking on a looked after child. Local authorities were clearly asking for guidance on how to effect reasonable financial arrangements. The view of this authority represents others who were grappling with the issues:

A key issue is the need to establish systems to ensure that relative and friends care is resourced appropriately and that carers in this position and children living with them are not disadvantaged because of their status. There is an increased need to encourage and effectively support these placements because of the known advantages of maintaining children and young people in their own families and communities as opposed to them being accommodated elsewhere. Consideration needs to be given, at a national level, as to what strategies could be put in place to promote these placements and provide them with relevant supports (financial and otherwise) without the necessity of social work intervention beyond the point it is required. Notwithstanding this, support services should be accessible on an equal basis to other children who need to be 'looked after' away from home.

The dilemma poses the following questions:

1. Should kinship carers be paid a basic standardised allowance which is commensurate with the basic fostering allowance?

2. How and when should section 50 (Children Act 1975) payments be used in kinship care?

3. When should section 22 (Children (Scotland) Act 1995) payments be used?

4. Should the UK benefits system be allowed to include kinship carers as carers irrespective of whether or not the child is looked after?

The main points

  • supporting kinship carers financially is a major issue for local authorities
  • there is considerable variation in the rates kinship carers are paid
  • kinship carers are often paid a lower rate than foster carers
  • there were two contrasting approaches to finance: one based on the status of the carer and the other on the status of the child
  • benefits legislation is unhelpful for new kinship carers
  • several different budgets are used to provide financial support for kinship carers
  • many authorities operate a customised system of financial support
  • there is need for some standardisation of financial support for kinship care placements
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