Benefits for grandparents caring for grandchildren

Almost 50 per cent of grandparents regularly take care of their grandchildren, according to research from Age UK. Whilst this time together allows them to bond and create cherished memories, the cost of caring for grandchildren can have a detrimental impact on finances for grandparents.

Whether it’s for a few hours a week or a more permanent arrangement, it is important that grandparents find out what benefits they may be entitled to if they are caring for grandchildren.

Specified Adult Childcare Credit

Although not technically a benefit, Specified Adult Childcare Credits allow grandparents who are caring for their grandchildren to earn National Insurance credits which contribute towards their State Pension.

To be eligible for Specified Adult Childcare Credit:

• The parent/main guardian of the child will need to be working.
• The person receiving Specified Adult Childcare Credit must be under State Pension age.
• The child being care for must be under 12 years old.

Child Benefit

Child Benefit is a set amount of money to help with the costs of raising a child. You don’t need to be the parent to receive the benefit. You may be a grandparent caring for grandchildren but you would need to be responsible for the child. This usually means they live with you and/or you are covering the costs of essentials, such as food and clothing.

Child Benefit can only be paid to one person per child.

Rates for Child Benefit 2025/26

	Weekly rates (2025/26)
Only/eldest child	£26.05
Two children	£43.30
Three children	£60.55

Child Tax Credit

Child Tax Credit is separate to Child Benefit but works in a similar way. If you’re eligible for this benefit and you are a grandparent caring for grandchildren, you’ll receive a sum of money for each child you are responsible for. This would have to mean they live with you and/or you are paying for essentials such as food and clothing.

New applications are closed for Child Tax Credit unless you already get Working Tax Credit. This is because Child Tax Credit is being replaced by Universal Credit (which we explore further on in the article).

Child Tax Credit is made up of the following elements – rates for 2025/26

	Annual rates (2025/26)
Child Tax Credit (family element)	£545
Child element	£3,455
Disability element (disabled child rate)	£4,170
Disability element (severely disabled child rate)	£5,850

If you’re eligible, the amount you’ll receive will depend on when you first made your claim for Working Tax Credit.

If you started your claim on or after 6 April 2017

• You’ll be able to get the child element for one or two children. 
• You’ll only be able to get the family element if at least one of your children was born before 6 April 2017.

If you started your claim before 6 April 2017

• You’ll be able to get the Family Element of Child Tax Credit
• You’ll be able to get the Child Element for children born before 6 April 2017.

We’ve got more information about switching from Child Tax Credits to Universal Credit in our article here.

Universal Credit

Universal Credit is available to help towards everyday living costs. You may be eligible if you receive a low income, are unable to work or receive other benefits, such as Personal Independence Payment (PIP). If you’re over State Pension age you won’t be eligible for Universal Credit, but we’ve covered other benefits you might be entitled to further down in the article.

Universal Credit rates – 2025/26

	Monthly rates (2025/26)
If you’re over 25 and single	£400.14
If you’re in a couple and you’re both over 25	£617.60

You may also be eligible for an additional payment for up to two children (if they live with you).

Additional payments for up two children – 2025/26

	Monthly rates (2025/26)
First child (born before 6 April 2017)	£339.00
First child (born on or after 6 April 2017) / second child	£292.81

Additional support

If you care for your grandchild(ren) on a permanent basis, you may be entitled to additional support.

This includes:

• SGO Allowance (if you have a special guardianship order).
• One off or regular payments from your local council to cover the costs of essentials, for example nursery costs, if you have a low income.

Kinship Compass offers more information on its website here.

Benefits for grandparents over state pension age:

There are alternative benefits and financial support you may be entitled to if you’re over State Pension age which could help with everyday living costs, including caring for your grandchild.

How much is Pension Credit in 2025/26?

Pension Credit offers an additional sum of money for people over State Pension age who have a low income. It’s separate from your state pension and can be used to help with everyday costs.

From April 2025, the weekly rate of Pension Credit will be:

• ££227.10 if you’re single.
• ££346.60 if you’re in a couple.

Housing Benefit

Housing Benefit helps towards the cost of your living accommodation if you’re in a rented house.

If you’re over State Pension age you can make a new claim if you’re single or live with a partner (as long as they are also over State Pension age).

To make a new claim for a couple, at least one of the following must apply:

• You (and your partner if eligible) have both reached State Pension age.
• You’re living in supported, sheltered or temporary housing.

You won’t usually be eligible for Housing Benefit if you own your own home.

The amount of money you’ll receive through Housing Benefit will depend on your circumstances, including any money you have in savings, how much your living costs are and if you receive any other benefits.

Council Tax Reduction

Also known as Council Tax Support, you can receive help to pay your council tax bill if you’re on a low income or are receiving certain benefits.

If you’re eligible, the amount of money you’ll receive will depend on your circumstances. Each council is responsible for its own reduction scheme. You can apply for Council Tax Reduction on the government website here.