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A few questions/ initial thoughts.
Can you confirm if the 18 year old young man has been through the education system in the UK and why no formal diagnosis has been made of autism?
You would not be able to be a foster carer for an 18 year old, as far as I understand, as they are an adult. You may be able to claim (on their behalf) benefits for them if there is an official diagnosis and they live with you though.
I'm also honestly sceptical as to whether the LA will consent to assessing you as foster carers so you can be paid to look after your niece.
Can you clarify for me whether the sister and brother in law are working (and therefore earning) currently please?
I think you would be approved very quickly as special guardians for your niece, but I don't feel that in my experience the LA are going to assess you as a foster carer and pay you to look after her when the special guardianship route is the most commonly used solution here. In order to be approved as a special guardian you need to give 3 months' notice to the LA before you can apply. The application wold then take 2-3 months to complete. There's more information here: https://www.gov.uk/apply-special-guardian
The birth parents would also be asked to pay child maintenance, that's fairly standard.
As to your nephew, as I said he is now an adult. If he is going to qualify for any kind of benefits he will need to be assessed by adult social care. It's odd nothing has been picked up in terms of any kind of diagnosis throughout all the years of mainstream schooling though, but that doesn't mean there isn't a diagnosis to be made.
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