6 Government Funds Grandparents Need To Know About (Especially If You Babysit for Free)
Written by
Heather Altamirano
Edited by
Rebekah Evans
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Grandparents play an important role in child care and, in some households, step in as the primary caretaker.
They provide vital support, often without pay, but there are government programs designed to help ease the financial burden. Here are six benefits grandparents should know about.
Child Tax Credit
Grandparents may qualify for the child tax credit (up to $2,200 per child, subject to income limits) if they claim a grandchild as a dependent, according to the IRS. But coordination matters, which is a big mistake families make, according to Peter Diamond, federally-licensed tax expert, accounting, real estate and certified bankability expert.
“Parents and grandparents both assume they can claim the child — or worse, no one does it properly,” he said. “The IRS does not care what position you take as long as it can be properly substantiated.”
Head of Household
The Head of Household filing status is one of the most underutilized tax advantages. For 2025, the standard deduction is $23,625, compared to $15,750 for single filers, per the IRS — a $7,875 difference that can reduce taxable income.
“As always, it comes down to facts and documentation,” Diamond said. “If the grandparent is the one truly running the household and supporting the child, they should be claiming the benefit.”
Child-Only TANF
Temporary Assistance for Needy Families (TANF) is a program that a grandparent can qualify for on behalf of their grandchild and can cover everything from food to housing and child care.
“I’ve seen families miss out on hundreds of dollars per month because nobody told them this existed,” said finance expert Andrew Lokenauth with Be Fluent in Finance. “Payments vary by state, but many receive $200 to $500 [or more] per child each month.”
Dependent or Survivor Social Security Benefits
If a child’s parent is retired, disabled or deceased, the grandchild may qualify for dependent or survivor benefits, per the Social Security Administration (SSA).
“The child receives a monthly benefit tied to the parent’s record, often $500 to $1,000 [or more] per month,” Lokenauth said. “The key step is contacting Social Security and providing documentation.”
SSI for the Child
Per the SSA, Supplemental Security Income (SSI) is for children with disabilities who meet financial need requirements. The benefit pays up to $943 per month for a qualifying child and goes to whoever is caring for them, according to the SSA.
“If your grandchild has a documented disability, physical or developmental, file an SSI application quickly because the process requires medical documentation and takes time, but the financial relief is worth the effort,” Lokenauth explained.
Housing and Utility Help (LIHEAP and Local Programs)
Raising grandchildren on a fixed income isn’t easy, but LIHEAP (the Low Income Home Energy Assistance Program) can offset your utility costs.
“Eligibility is based on income and household size, so adding grandchildren to your household may increase the assistance you qualify for,” Lokenauth said. A local Area Agency on Aging or a family resource center may also have programs to help with utility credits and emergency funds that “most people never tap into,” he added.
For grandparents on a tight budget, these programs can make a difference.
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