Child Arrangements Order Allowance in England

A "lives with" child arrangements order gives you shared parental responsibility and a legal basis to make day-to-day decisions for the child. What it does not automatically give you is a council allowance — and that catches many kinship carers off guard.

The financial support available to CAO holders in England depends almost entirely on whether the child was looked after by the council before the order was made.

When Councils Do Pay

If the child was formally looked after — accommodated under Section 20 or subject to a care order under Section 31 of the Children Act 1989 — before the "lives with" CAO was granted, councils often exercise their discretionary power to pay an ongoing allowance. Many align the rates and means test with their SGO allowance scheme, using the same fostering rate baseline minus Child Benefit and UC child element, adjusted for household income.

This is discretionary, not mandatory. The legal authority is Schedule 1, Paragraph 15 of the Children Act 1989. But councils that moved a child from care into a kinship placement typically recognise that withdrawing financial support would undermine the placement.

When Councils Do Not Pay

If the child came to live with you through a private family arrangement — a parent asked you to take the child, or the child turned up at your door — and the child was never formally in the care system, CAO financial allowances may be unavailable. You may receive nothing from the council beyond a possible Section 17 one-off payment for immediate needs.

Some councils have unpublished policies. If your council says CAO allowances are unavailable, you can:

1. Submit a Freedom of Information request asking for the council's policy on financial support for "lives with" CAO holders
2. Request a formal assessment under Section 17 of the Children Act 1989 as a child in need
3. Ask the council to apply their SGO means-test framework to your circumstances, even without a statutory obligation

What You Can Always Claim

Regardless of whether the council pays an allowance, a CAO holder can claim:

• Child Benefit from HMRC (£27.05/week first child, £17.90/week additional children)
• Universal Credit child element from DWP (£303.94/month per child, or £351.88 if born before April 2017)
• Guardian's Allowance from HMRC if both parents have died or the surviving parent meets certain conditions (£22.95/week)
• Disabled Child Addition through UC if the child receives DLA or PIP
• Kinship Zone pilot allowance if you live in one of the seven pilot council areas and meet the pilot criteria, including the "otherwise in care" threshold and holding, or being in proceedings toward, a qualifying SGO or CAO

The CAO itself is your proof of responsibility. HMRC and DWP accept it as evidence for transferring Child Benefit and adding children to your UC claim.

CAO vs SGO: The Financial Difference

The practical financial difference between a CAO and an SGO is the council's legal duty. An SGO triggers a mandatory assessment obligation under Section 14F. A CAO triggers only a discretionary power. If ongoing council financial support is important to your household, this is one factor to discuss with a family solicitor or the Kinship advice line (0300 123 7015) before deciding which order to apply for.

Our kinship financial help guide includes a side-by-side comparison of what each order type unlocks financially, including the exact calculation councils use for discretionary CAO allowances where they do pay.

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