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Cooperatively breeding vertebrates typically live in family groups in which some offspring delay breeding and remain on the natal territory to help rear younger siblings. However, field studies find that helpers can have a neutral or even negative effect on the survival of their relatives. Why, then, do helpers remain, and why do parents tolerate them? Here, we use a kin selection approach to model the conditions under which tolerating helpers is adaptive to parents. Unlike previous models, we consider scenarios in which relatives compete for breeding opportunities in a saturated habitat. We show that kin competition is sufficient to favour tolerance of helpers, even when helpers decrease parental survival or fecundity. Helping is additionally favoured when delaying dispersal benefits the helper (either by decreasing the costs of dispersal or by increasing the chance of territory inheritance). This suggests that the division of reproduction in cooperative family groups can emerge for reasons unrelated to the effects of help itself, but the resulting society sets the stage for more elaborate forms of division of labour. Kin-based helping may therefore be adaptive not only because helpers are related to the brood whom they help, but also because delayed breeding reduces reproductive conflict among siblings. This article is part of the theme issue ‘Division of labour as a key driver of social evolution’.