APPENDIX E: CALCULATION OF FINANCIAL ALLOWANCES
1. In 2015 the Scottish Government, in negotiation with Convention of Scottish Local Authorities ( COSLA), announced additional funding to ensure eligible kinship carers received parity of allowances with foster carers in their local authority area. It should be noted that fees for foster carers are a separate issue and are not included in this agreement. This agreed parity includes:
a) All kinship carers who are caring for a looked after child.
b) Eligible kinship carers where the child is subject to a kinship care order and
i. The child was previously looked after; or
ii. The child was placed with the involvement of the local authority; or
iii. The child is at risk of becoming looked after.
2. The group described under a) already have the statutory right to an allowance under Regulation 33 of the Looked After Children (Scotland) Regulations 2009. The 2014 Act and the 2016 Order set out eligibility criteria and the duty to pay an allowance to the group described at b) (above). As discussed in Part 2 of the guidance, a child placed by the local authority is by definition a child who is at risk of becoming looked after because that child can no longer remain in the care of their parent(s).
3. There is no nationally agreed set of allowances for foster care and kinship care in Scotland. In 2016, the Scottish Government will convene a review group to consider a National Allowance Rate which would establish parity across local authorities. This guidance does not prescribe a minimum allowance rate.
4. For those eligible kinship carers, local authorities will need to ensure parity of allowances for children cared for by kinship carers and foster carers. Kinship carers who have a child placed on a kinship care order are likely to be eligible for child related benefits and tax credits. A local authority will wish to ensure that all kinship carers are fully aware of their eligibility for child-related benefits and tax credits and should fully support kinship carers to access all relevant benefits for the children in their care. Child tax credit is a means-tested state benefit payable for children under the age of 16. Young people up to the age of 20 can also receive child tax credit if they are in approved education or training. Foster carers are not eligible for child tax credit or child benefit. Local authorities will wish to take these child-related benefits received into account when calculating the allowance to be paid to an eligible kinship carer, to ensure that there is no double funding.
5. The complexity of the UK benefits system and the roll-out of the social security provision of Universal Credit will require the specialist advice of Welfare Rights Officers. The introduction of Universal Credit is likely to increase the complexity for local authorities calculating allowances as there will no longer be a succinct breakdown of child tax credit. There are also national organisations, such as Citizens Advice Scotland and Child Poverty Action Group who can provide specialised advice and support on these matters (see Appendix F).
6. Some children will be eligible for additional child tax credit if they are in receipt of Disability Living Allowance and/or are severely sight impaired or blind. The Scottish Government considers that the disability element of child tax credit is additional to the standard rate of child tax credit and as such should not be deducted when local authorities are calculating allowances. This additional child tax credit represents the additional cost of caring for a disabled child.
7. In some circumstances, carers may be eligible for a Guardian's allowance. This UK benefit is for children where one or both parents have died. It may also be sought where a parent has died and another parent is untraceable, imprisoned or detained in hospital (see for HMRC for more details on eligibility). The current weekly rate is £16.55. This benefit is not means tested and will not impact on any other benefits. This allowance should not be deducted from any allowance paid under the 2016 Order.
8. As part of a financial assessment, local authorities should consider whether families may require additional financial support for special events - such as children's birthdays and religious celebrations. For example, some Scottish local authorities provide foster carers with an additional four week allowance to cover the cost of birthdays, holidays and religious festivals. Similar schemes could be developed for eligible children cared for under kinship care orders as appropriate.
9. Local authorities who wish to consider means testing as part of a financial assessment, should seek their own legal advice on the interpretation of the 2014 Act and 2016 Order. The Scottish Government, however, expects that kinship carers and guardians on welfare benefits should not be means tested.
10. Local authorities should provide financial allowances to eligible kinship carers via a timely method that meets the families' needs. In the majority of cases, this will be a monthly payment into a bank account. Where local authorities need to make a single payment, they must provide details of the amount and the date on which the payment will be made as stated in section 8(2)(c) of the 2016 Order.
11. Eligible kinship carers are entitled to allowances for the child from the date when a kinship care order is granted by the court and the local authority has been satisfied of their eligibility in terms of being at risk of becoming looked after or being previously looked after (see previous sections on assessment of eligibility).
12. The Scottish Government announced enhanced allowances could be payable from 1 st October 2015. If, at that date, a local authority was aware of a section 11 order (deemed a kinship care order from April 2016), and satisfied that the child was an eligible child, then entitlement to an increased allowance should be backdated to 1 st October 2015. If a kinship carer or a guardian presents to a local authority with a kinship care order that the local authority were not aware of, then eligibility to allowances should be from the point that the local authority is satisfied of eligibility, and not backdated.