You can block certain types of payments, like from select countries, but not by email.
What I see as a potential problem is the process of your being the middle person in a transfer scheme. PayPal could see this a highly suspicious and limit all associated accounts if one has a problem. The whole process may look like money laundering.
The senders should be sending the money directly to your step-daughter.
Even so, too many family/friends transactions and no buy-sell transactions can look suspicious.
