Raising My Grandchild: Three Pots, Three Sets of Rules

If your daughter has died and you are now raising her children — your grandchildren — there is no single grandparent benefit, and no one payment called a grandchild allowance, that covers it. What exists instead is three separate pots of money, each run by a different body and each with its own rules: Child Benefit and Guardian's Allowance from HMRC, extra amounts for a child inside Universal Credit or Pension Credit, and allowances from the local authority where they placed the child with you. They can overlap, but they do not join up, and no one office will tell you about the other two.

The most important thing to grasp early is that almost none of this moves to you automatically. Child Benefit does not transfer from a dead parent to a grandparent on its own; you have to claim it in your own name. Guardian's Allowance is not paid unless you ask for it. And the extra help inside Universal Credit or Pension Credit only appears once you report that you are now responsible for a child. Money you do not claim is simply not paid.

This page takes the three pots in turn, explains what a grandparent raising a grandchild can realistically claim, and sets out which of them can be held at the same time.

The short answer: three pots, three sets of rules

Think of what you can claim as three layers. The first is the universal layer: Child Benefit for the child, and Guardian's Allowance on top of it, both from HMRC and neither depending on your income. The second is the means-tested layer: extra amounts for a child inside Universal Credit if you are of working age, or Pension Credit if you have reached the qualifying age. The third is the local authority layer: kinship care allowances or special guardianship support, paid by the council, and usually assessed against your means.

They are worth thinking about separately because they answer to different masters. HMRC does not care what the council pays you; the council may well care what everyone else pays you. Getting the order right — claiming the non-means-tested money first and understanding how the rest treats it — is how you avoid leaving money unclaimed or, worse, triggering a demand for it back later. If you want to see how the various state payments after a death add up across a whole family, our running total of every bereavement payment added together gives the wider picture.

Child Benefit does not move across on its own

When a parent dies, their Child Benefit does not automatically pass to whoever now cares for the child. As the person now bringing the child up, you make a fresh claim for Child Benefit in your own name. This matters for a reason beyond the payment itself: entitlement to Child Benefit is the gateway to Guardian's Allowance, so without the Child Benefit claim in place, the more valuable allowance cannot be paid at all.

Only one person can receive Child Benefit for a given child, so if someone else was claiming it up to the death, that has to be sorted out before your claim can run cleanly. The mechanics of how Child Benefit and the Universal Credit child amounts respond to a death, and the fact that they run on different clocks, are worth understanding in their own right; we cover that timing in our note on the two clocks that run after a child comes into or leaves a household.

Guardian's Allowance: the payment for a child whose parents have died

Guardian's Allowance is the payment most directly aimed at your situation, and it is the one grandparents most often miss. It is a weekly amount paid by HMRC on top of Child Benefit, it is not means tested, and it is not taxed as your income. Because it is not means tested, your earnings, savings and pension make no difference to it — a point that catches people who assume that having some income of their own rules them out.

You do not have to be the child's legal guardian to claim it, despite the name. You qualify by bringing up a child and being entitled to Child Benefit for them. It is normally paid where both of the child's parents have died, but it can also be paid where only one parent has died and the surviving parent cannot be traced, is serving a prison sentence, or is in certain other limited situations. Because those extra circumstances are narrowly defined, it is worth ringing the Guardian's Allowance Unit to check rather than assuming you do not qualify.

The current weekly rate is set by HMRC and changes from year to year, so rather than quote a figure that may be out of date, check the live amount on the GOV.UK Guardian's Allowance page before you budget around it. What matters here is the principle: it is money you keep whatever else you have coming in.

Universal Credit and Pension Credit for a child you now support

Once you are responsible for a child, the means-tested benefits recognise it. If you are of working age and on Universal Credit, your award can include a child element for the grandchild. If you have reached the qualifying age, Pension Credit can include an additional amount for a child instead. Which one applies turns on your age, not on choice, and taking on a child is a change of circumstances you should report promptly so the extra amount is added from the right date.

There is one rule here that works in your favour and is easy to miss. Universal Credit normally limits the child element to two children, but children you are looking after under a kinship or guardianship arrangement — rather than as their parent — are generally exempt from that two-child limit. So taking on a grandchild does not usually push your own children over the cap, and the grandchild's element can be paid even if you already have two children of your own. This exception is not applied automatically in every case, so if the limit appears to have been used against a kinship child, it is worth querying.

If you are coping with Universal Credit for the first time because of a death in the family, the way the benefit responds to a bereavement — in assessment periods rather than months — is set out in our guide to the three assessment periods that follow a death, which explains the rhythm the system works to.

Kinship care and special guardianship allowances from the council

The third pot is the local authority's, and it is the least predictable, because it is largely discretionary and differs from council to council. Two main routes exist. The first is a kinship care allowance, payable where the local authority arranged the placement and the child is, in effect, being looked after by you on the council's behalf. The second is a special guardianship support allowance, which can follow a special guardianship order made by a court.

Both are usually means tested, often reviewed each year, and set locally rather than nationally, so what a grandparent receives in one area can differ sharply from another. A key distinction to establish is whether the council formally placed the child with you, which tends to bring stronger entitlements, or whether you stepped in privately, which usually brings weaker ones. If you took the child in during a crisis without the council arranging it, ask the children's services team directly what support is available, and ask in writing so you have the answer on record.

Because these allowances are means tested, the council may take your other income into account when it works out what to pay — and that can include money from the other two pots. This is exactly why the order in which things interact matters, which is the subject of the next section.

What can be held at the same time

The reassuring headline is that the non-means-tested money stacks. Guardian's Allowance comes from HMRC and does not depend on your income, so it can generally be held alongside a council allowance without reducing it. Child Benefit sits underneath both. The two-child exception means the Universal Credit child element for a kinship grandchild usually survives as well.

The interaction to watch runs the other way. Because local authority allowances are means tested, a council may treat Guardian's Allowance, or other income, as part of your means when it decides its own discretionary payment — so the council payment can be lower because of what HMRC pays, even though HMRC's payment is never lowered by the council's. Ask each body, in writing, how it treats the others. The answers are not always consistent, and having them on paper is what protects you if a figure is later questioned or an overpayment is alleged.

Scotland and Northern Ireland

The HMRC layer — Child Benefit and Guardian's Allowance — works the same across the whole UK, because those are reserved benefits. The local authority layer is where the nations diverge. Special guardianship orders are a feature of the law in England and Wales; Scotland uses kinship care orders and its own system of kinship care assistance, and Northern Ireland has its own arrangements again. The idea of a court order fixing who raises the child, with support attached, exists everywhere, but the name, the route and the allowances differ.

Other help after a death is devolved too. Scotland runs its own systems for a good deal of what the DWP handles elsewhere, including funeral help with markedly different rules, which we explain in our guide to Scotland's funeral payment and its close-relative rule. Wherever you are, the pattern is the same: the support is real but it is a patchwork, and it is built for a child who has already lost a parent rather than to prevent that loss leaving a household short. For the wider set of payments and duties that follow a death, our guide to bereavement benefits and state support ties the threads together.

That patchwork is also why so many parents with young children arrange life cover of their own: a policy designed to pay a lump sum or a family income if a parent dies is meant to sit above the state's floor, not to rely on it. If that is something you are thinking about for the rest of your family, an FCA-authorised broker can talk it through, and you can get life insurance quotes to see what is available — what an insurer offers always depends on underwriting.

Frequently asked questions

What can a grandparent claim after their daughter dies?

Usually Child Benefit for the child, Guardian's Allowance on top if the conditions are met, and extra amounts in Universal Credit or Pension Credit for a child you are responsible for. Where the local authority placed the child with you, a kinship allowance may be payable too.

Can Guardian's Allowance be paid alongside a kinship allowance?

Guardian's Allowance comes from HMRC and is not means tested, so it can generally be held alongside council payments. Local authority allowances are often means tested and some councils take other income into account, so ask the council in writing how they treat it.

Does a special guardianship order change what I can claim?

It can open up a special guardianship support allowance from the local authority, which is discretionary, usually means tested and reviewed each year. It does not by itself end Guardian's Allowance, which turns on the parents' circumstances rather than on the type of order.