Praise be to Allah.
There is nothing wrong with giving children and adults the so-called “eidiyyah”. It comes under the heading of good manners and nice traditions, but we should point out a few things:
1. Paying attention to equity in giving. It is not right to give it to some of one’s children and not others, or to some of one’s sisters and not others, because of what that leads to of creating resentment and provoking jealousy and grudges within a single family.
2. It is not necessary to give the same amount of money to each family member; rather attention should be paid to children’s ages, and one may give to an adult what one does not give to a child, and to a married person what one does not give to a single person, and so on.
3. Small children should be watched with regard to the ways in which they spend the “eidiyyah” that they receive from their family and relatives, because on Eid people often go out to places of entertainment and leisure, and play games that involve gambling, and clubs and cinemas open their doors. So there is a need to watch the children and supervise the way in which they spend their money.
In the answer to question no. 125810 we quoted the scholars of the Standing Committee for Issuing Fatwas as saying that the “eidiyyah” is permissible.
And Allah knows best.