What is the ruling on giving Zakaah to one's unmarried sister who has no source of income? Can she, after receiving Zakaah, spend money, such as a gift during ‘Eed, on the children of the one who gave her Zakaah?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.

There is nothing wrong with giving Zakah to one's sister as long as she is poor or needy.

As for the beneficiary sister giving out of what she has received to the children of the one who gave her Zakah, if he gives Zakah to her so that she can spend it on his children, this is not permissible, as in this case the Zakah reaches those the giver is obliged to spend on. This is allowable; however, if she does so of her own accord, as she becomes the owner of the money once she has received it and can spend it as she wills.

Allaah Knows best.