I have family sharing turned on however my wife cannot access icloud drive on her phone, it just asks to upgrade her icloud drive

Does your wife have the standard 5GB plan?

Can your wife use other Family Sharing options, for example download shared apps?

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When you share iCloud+, any family members using the free 5GB plan are added to your family plan automatically.

If a family member is already paying for their own iCloud+ plan, they can choose to switch to your plan or keep their own and still remain part of the family. When they switch to the shared family plan, they get a refund for the remainder of their personal plan. They can't keep their current plan and use the shared family plan at the same time.

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copied from: Share iCloud+ with your family - Apple Support

Glad it has been solved that way.

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