Children's Handbook Scotland 2020/21Chapter 7: Children living with kinship carers4. Benefits and tax credits if a child is looked after Means-tested benefits
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Means-tested benefits
Universal credit
If you are a kinship carer of a looked-after child or children, your universal credit (UC) does not include any child element for the child(ren) unless you have legal parental responsibilities for the child(ren).1Regs 4 and 4A UC Regs Most kinship carers of looked-after children do not have legal parental rights and, therefore, do not get a child element for the child or children they care for.2If there is a permanence order in place in respect of the child, the child is looked after by the local authority but you may, as a kinship carer, have parental rights and responsibilities vested in you. In this situation, your UC may include the child element for the child. However, the UC rules appear to still prevent this because they excluded ‘foster carers’ from getting the child element and the definition of foster carer includes Scottish kinship carers of looked-after children (reg 2 UC Regs). It is unclear whether this is the DWP’s intention. CPAG has asked the DWP for clarification.
A ‘two-child limit’ was introduced on 6 April 2017 (see here). There are some exemptions from this rule, including a child in kinship care where you have parental rights or responsibilities for her/him as a result of a permanence order and if you are receipt of guardian’s allowance in respect of the child. S/he continues to be exempt after her/his 16th birthday, providing you are still responsible for her/him.3Reg 24B(2A) and Sch 12 para 4(2) UC Regs
UC includes a housing costs element. If you live in rented accommodation, the amount is based on how many rooms you need (the ‘size criteria’). A looked-after child in kinship care for whom you do not get a child element is not allocated a room in the size criteria. However, kinship carers of looked-after children are allowed one extra bedroom in the size criteria.4Reg 2 and Sch 4 paras 9 and 12 UC Regs A looked-after child in kinship care for whom you do not get a child element does not count as a dependent child for the purposes of the work allowance (see here) or the childcare costs element (see here).
If you are caring for a looked-after child aged under one and you are single, or you are in a couple and are nominated as the main carer, you are not subject to any work-related requirements (see here).5Reg 89(1)(f) UC Regs If you are caring for a looked-after child aged between one and 16 and you are single, or you are in a couple and are nominated as the main carer, you are subject to the work-focused interview-only requirement (see here). This can extend beyond the child’s 16th birthday if s/he has care needs which would make it unreasonable for you to meet the work search or work availability requirements, even if these were limited.6Reg 91(2)(a) and (b) UC Regs
If you are in a couple and your partner is the main nominated carer, you can be subject to the work-focused interview-only requirement if you and your partner are caring for a child or qualifying young person (see here) who has care needs which would make it unreasonable for either of you to meet the work search or work availability requirements, even if these were limited.7Reg 91(2)(c) UC Regs
Local authority payments are disregarded as income for UC.8Reg 66 UC Regs
 
1     Regs 4 and 4A UC Regs »
2     If there is a permanence order in place in respect of the child, the child is looked after by the local authority but you may, as a kinship carer, have parental rights and responsibilities vested in you. In this situation, your UC may include the child element for the child. However, the UC rules appear to still prevent this because they excluded ‘foster carers’ from getting the child element and the definition of foster carer includes Scottish kinship carers of looked-after children (reg 2 UC Regs). It is unclear whether this is the DWP’s intention. CPAG has asked the DWP for clarification. »
3     Reg 24B(2A) and Sch 12 para 4(2) UC Regs »
4     Reg 2 and Sch 4 paras 9 and 12 UC Regs »
5     Reg 89(1)(f) UC Regs »
6     Reg 91(2)(a) and (b) UC Regs »
7     Reg 91(2)(c) UC Regs »
8     Reg 66 UC Regs »
Income support
Note: if you are not already getting income support (IS), you are very likely to have to claim UC instead.
If you are a kinship carer, your IS may be affected in the following ways.
    •If you are caring for a child aged under 16 and you do not have a partner, you can claim IS on the basis of being an kinship carer of a looked-after child.1Sch 1B para 2 IS Regs
    •If you have been getting IS since before 6 April 2004 and you have a dependent child, you may still be getting amounts in your IS for her/him. This is only the case if you have not claimed child tax credit (CTC). See here for more information. If this applies to you because you get IS for other children in the family and you now want to include the child who has come to live with you, s/he must be considered to be part of your household (see here).
 
Part of your household
Sometimes, even though a child lives with someone, s/he is not treated as part of her/his household for IS purposes. It is possible that the Department for Work and Pensions (DWP) may not treat the child for whom you care as part of your household for IS purposes. This is because the rules that affect kinship carers are not clear.2Reg 16 IS Regs sets out circumstances in which a person is to be treated as not being a member of the household. Arguably, your situation does not fall within this because the arrangement does not amount to the child being ‘boarded out under a relevant enactment’. If the DWP decides the child is not part of your household for IS purposes and you lose benefit as a result, seek advice.
 
The effect of local authority payments
The local authority may be paying you under section 22 of the Children (Scotland) Act 1995, section 50 of the Children Act 1975 or regulation 33 of the Looked After Children (Scotland) Regulations 2009.
Any payment the local authority makes should be disregarded in full,3Sch 9 paras 25(1)(ba), 26 and 28(1)(c) IS Regs; Vol 5 Chap 28 para 28378 DMG except if you are still getting amounts in your IS for a child. In this case, Section 50 payments count as income up to the amount equal to the child’s personal allowance and any disabled child premium for that child.4Sch 9 para 25 IS Regs, unamended by SS(WTCCTC)(CA) Regs SS(WTCCTC)(CA) Regs for claimants still receiving amounts for children in IS
 
1     Sch 1B para 2 IS Regs »
2     Reg 16 IS Regs sets out circumstances in which a person is to be treated as not being a member of the household. Arguably, your situation does not fall within this because the arrangement does not amount to the child being ‘boarded out under a relevant enactment’. »
3     Sch 9 paras 25(1)(ba), 26 and 28(1)(c) IS Regs; Vol 5 Chap 28 para 28378 DMG »
4     Sch 9 para 25 IS Regs, unamended by SS(WTCCTC)(CA) Regs SS(WTCCTC)(CA) Regs for claimants still receiving amounts for children in IS »
Income-related employment and support allowance
You can get income-related employment and support allowance (ESA) if you satisfy the rules in Chapter 1. There are no additional amounts in ESA for dependent children.
 
The effect of local authority payments
The local authority may be paying you under section 22 of the Children (Scotland) Act 1995, section 50 of the Children Act 1975 or regulation 33 of the Looked After Children (Scotland) Regulations 2009.
Any payment the local authority makes should be disregarded in full.1Sch 8 paras 26(1)(b), 28 and 30(1)(c) ESA Regs; para 51255 DMG Vol 9 Ch 51
 
1     Sch 8 paras 26(1)(b), 28 and 30(1)(c) ESA Regs; para 51255 DMG Vol 9 Ch 51 »
Jobseeker’s allowance
Note: if you are not already getting income-based jobseeker’s allowance (JSA), you are very likely to have to claim UC instead.
If you are a kinship carer, your JSA may be affected in one of two ways.
    •If you have been getting JSA since before 6 April 2004 and you have a dependent child, you may still be getting amounts in your JSA for her/him. This is only the case if you have not claimed CTC. If this applies to you because you get JSA for other children in the family and you now want to include the child who has come to live with you, s/he must be considered to be a member of your household for JSA purposes (see here).
    •Some couples have to make a joint claim for JSA, which means that you both need to claim, ‘sign on’ and look for work. This does not apply if you and your partner are caring for a child.
 
Part of your household
Sometimes, even though a child lives with someone, s/he is not treated as part of her/his household for JSA purposes. It is possible that the DWP may not treat the child for whom you care as part of your household for JSA. This is because the rules that affect kinship carers in this situation are not clear.1Reg 78 JSA Regs sets out circumstances in which a person is to be treated as not being a member of the household. Arguably, your situation does not fall within this because the arrangement does not amount to the child being ‘boarded out under a relevant Scottish enactment’. If the DWP decides that a child is not part of your household for JSA purposes, and you lose benefit as a result, seek advice.
 
The effect of local authority payments
The local authority may be paying you under section 22 of the Children (Scotland) Act 1995, section 50 of the Children Act 1975 or regulation 33 of the Looked After Children (Scotland) Regulations 2009.
Any payment the local authority makes should be disregarded in full,2Sch 7 paras 26(1)(ba), 27 and 29(1)(c) JSA Regs; para 28378 DMG Vol 5 Ch28 except if you are still getting amounts in your JSA for a child. In this case, Section 50 payments count as income up to the amount equal to the child’s personal allowance and any disabled child premium for that child.3Sch 7 para 26 JSA Regs, unamended by SS(WTCCTC)(CA) Regs for claimants still receiving amounts for children in JSA
 
1     Reg 78 JSA Regs sets out circumstances in which a person is to be treated as not being a member of the household. Arguably, your situation does not fall within this because the arrangement does not amount to the child being ‘boarded out under a relevant Scottish enactment’. »
2     Sch 7 paras 26(1)(ba), 27 and 29(1)(c) JSA Regs; para 28378 DMG Vol 5 Ch28 »
3     Sch 7 para 26 JSA Regs, unamended by SS(WTCCTC)(CA) Regs for claimants still receiving amounts for children in JSA »
Pension credit
You can get pension credit (PC) if you satisfy the rules on here. Some PC claimants who are responsible for a child or qualifying young person get an additional amount for the child(ren) in their PC (instead of CTC). You will not get this additional amount for a looked-after child unless you have legal parental responsibilities for the child.1Sch 2A para 4(1) and (3)(b) SPC Regs Most kinship carers of a looked-after child do not have parental rights: the exception is if you have a permanence order when you may also have parental responsibility.
Local authority payments are disregarded as income for PC.2Reg 15 SPC Regs
 
1     Sch 2A para 4(1) and (3)(b) SPC Regs »
2     Reg 15 SPC Regs »
Housing benefit and council tax reduction
Note: if you are not already getting housing benefit (HB), you are very likely to have to claim UC instead, unless you and your partner, if you have one, are over pension age.
HB and council tax reduction (CTR) may be affected in several ways if you are a kinship carer of a looked-after child.
 
Housing benefit
The child you care for may not be treated as part of your household/occupying your home for HB purposes, even though s/he lives with you.1Reg 21(3) HB Regs; reg 21(3)(a) HB(SPC) Regs. These regulations state that the child is treated as not being part of your household and not occupying your home where s/he is placed with you under a ‘relevant enactment’. Relevant enactment includes the Children (Scotland) Act 1995, the Adoption and Children (Scotland) Act 2007 and the Children’s Hearings (Scotland) Act 2011. This can affect your HB in a number of ways.
    •If the child is not part of your household, your applicable amount does not include amounts for the child. If you are on IS, income-based JSA, income-related ESA or the guarantee credit of PC, you are passported to the maximum amount of HB (see here). However, your HB may still be affected - see the next two bullet points.
    •If you live in private rented accommodation and your HB is calculated using the ‘local housing allowance’ (see here), the ‘size criteria’ used to work out your local housing allowance does not include the child(ren) you care for. However, you are allowed one extra room in the size criteria because you are a kinship carer of a looked-after child.2Reg 13D(3A)(b) HB Regs; reg 13D(3A)(b) HB(SPC) Regs
    •If you are under pension age and you live in the social rented sector, the child is not included in the ‘size criteria’ and you may be treated as under-occupying your home. This may result in your being subject to an under-occupation penalty (‘bedroom tax’). However, you are allowed one extra room in the size criteria because you are a kinship carer of a looked-after child.3Reg B13(6)(b) HB Regs
If you are struggling to pay your rent because of the HB rules, you should claim a discretionary housing payment (see here).
 
Council tax reduction
If you are on IS, income-based JSA, income-related ESA or the guarantee credit of PC, you are passported to maximum CTR. If you are not passported to maximum CTR, the amount you get depends on whether the child you care for counts as part of your household for CTR purposes and, therefore, whether s/he is included in your applicable amount (see here). Sometimes, even though a child lives with you, s/he is treated as not part of your household, and it is possible that this may happen to you. This is because the rules that affect kinship carers in this situation are not clear.4Reg 11(2)(a) CTR(S) Regs; regs 11(2)(a) CTR(SPC)(S) Regs. These rules state that a child is not part of your household if s/he is ‘boarded out with you under a relevant enactment’. It is arguable that this should not apply to you. If the local authority decides that the child is not part of your household for CTR purposes and you lose money as a result, seek advice.
 
The effect of local authority payments
The local authority may be paying you under section 22 of the Children (Scotland) Act 1995, section 50 of the Children Act 1975 or regulation 33 of the Looked After Children (Scotland) Regulations 2009. Any payment the local authority makes should be disregarded in full for HB and CTR.5HB Sch 5 paras 25(1)(ba), 26(a)(ii) and (iii) and 28 HB Regs; reg 29(1) HB(SPC) Regs
CTR Sch 4 paras 29(1)(b), 30(a) and 32 CTR(S) Regs; reg 27(1) CTR(SPC)(S) Regs
If payment is made under s50 and the child is not treated as part of your household, the payment should be disregarded provided you spend the payment on the child: reg 46(6)(c) HB Regs; reg 41(3)(c) CTR(S) Regs
 
1     Reg 21(3) HB Regs; reg 21(3)(a) HB(SPC) Regs. These regulations state that the child is treated as not being part of your household and not occupying your home where s/he is placed with you under a ‘relevant enactment’. Relevant enactment includes the Children (Scotland) Act 1995, the Adoption and Children (Scotland) Act 2007 and the Children’s Hearings (Scotland) Act 2011. »
2     Reg 13D(3A)(b) HB Regs; reg 13D(3A)(b) HB(SPC) Regs »
3     Reg B13(6)(b) HB Regs »
4     Reg 11(2)(a) CTR(S) Regs; regs 11(2)(a) CTR(SPC)(S) Regs. These rules state that a child is not part of your household if s/he is ‘boarded out with you under a relevant enactment’. It is arguable that this should not apply to you. »
5     HB Sch 5 paras 25(1)(ba), 26(a)(ii) and (iii) and 28 HB Regs; reg 29(1) HB(SPC) Regs
CTR Sch 4 paras 29(1)(b), 30(a) and 32 CTR(S) Regs; reg 27(1) CTR(SPC)(S) Regs
If payment is made under s50 and the child is not treated as part of your household, the payment should be disregarded provided you spend the payment on the child: reg 46(6)(c) HB Regs; reg 41(3)(c) CTR(S) Regs »
Scottish child payment
You can get Scottish child payment for a looked-after child if you satisfy the normal conditions of entitlement, including being responsible for the child (see here).