By Paul Lewis
BBC Radio 4's Money Box
The basic allowance for a foster parent is about £200 a week
People who look after a relative's child often miss out on money from the local council.
Campaigners claim these "kinship carers" may get no help with the cost of caring for the child.
They warn that some have to go to court to make local councils pay them as foster parents.
But the Local Government Association denies the problem is widespread and says all local authorities should follow the law.
Recent court cases have highlighted the problems some relatives face when they take over a parent's role.
The relatives' lawyer, Nigel Priestley of solicitors Ridley & Hall, explained the outcome to Money Box on BBC Radio 4.
"Recently we brought cases against two London Boroughs.
"In one they've paid back-pay of £37,000 and in the other almost £50,000.
"And in one case their money has leapt from £85 per week to £410 a week.
"Over recent years we have got total back-pay [for families] in excess of £500,000."
Nigel Priestley helps people who have been asked by social services to look after a relative's child but who are then not paid as foster parents.
But under rules set out by Mr Justice Munby in 2001 in a judgement against Manchester City Council, a local authority which places a child with a relative should pay them the same basic allowance as a foster parent - about £200 a week.
Nigel Priestley claims many authorities are not implementing that decision.
"Seven years on from the Munby judgement it simply isn't happening.
"I've seen a confidential memo in a northern authority which accepts they are still breaking that judgement.
"Local authorities have to be challenged because they don't back down easily."
The Local Government Association (LGA) denies that claim.
No-one there would give an on the record statement to the BBC.
But the LGA view is that in the last three or four years all local authorities have changed their procedures to conform to Munby.
Cathy Ashley, chief executive of Family Rights Group, warns of another problem facing relatives who take on the parental role.
"Unless the local authority has placed the child with the relatives then they don't have a right to any financial support for the additional costs of raising that child."
And she says they should always seek advice about making a strong case to the local authority,
"Think through fully the implications of that child living with you.
"That is when you have the strongest bargaining position."
BBC Radio 4's Money Box was broadcast on Saturday,
30 August 2008 at 1204 BST.