wellhellobeautiful - this is the difficulties of separated parents and blended families. If you have your DSS 60/40 really your DP should be claiming those benefits. I'm guessing DSS's mum earns significantly less than your DP, which is why that's not the case, and this is the best way to ensure DSS has a similar standard of living between his two homes. It would be better in many cases I think to split benefits between parents based on the amount of time a child spends with each parent. It would save a lot of resentment, but would be horrendously complicated I suppose.
When you become involved with someone who has a child, you take on certain responsibilities to that child. I'm not going to judge you for finding that hard to deal with or feeling the odd resentful feeling about it. You wouldn't be human if you didn't. After all, you've been responsible enough to ensure you didn't have a child of your own before you're ready and your DSS has two able-bodied, living parents. Many step-parents think it's simply a case of moving in and making an effort to be kind to the child and do 'parenty' things like help with homework and reading a story at bedtime. Why would you think it's anything other if you haven't had children of your own? I know I had no understanding of the practical responsibility and emotional protectiveness having a child would make to my life.
But as you've found out, it's not that simple. It's situations like this that cause problems - where doing what's best for a child means that the step-parent has to make a sacrifice that isn't a sacrifice at all to the bio-parent because the child is his. Or when new children are added to the mix and there's a question mark over treating them equally (after all, DSS will then have three parents, three incomes, two homes, two sets of holidays as opposed to the mere two parents, etc, your child has).
When you move in with someone who has DC living with them most or all of the time, you need to treat it with the same seriousness as if you are getting married if it's going to work. You have to accept that your life is now inextricably bound up with theirs in terms of responsibility for all things financial, practical and familial. It's not the same as moving in with someone who doesn't have DC. That's because DC come first and that often means being unfair to the adults in their lives. I think you did the right thing by paying half of your DSSs activity costs. What should have happened is that you/DP paid half and your Dss's mum paid half, but if she couldn't afford it, you pay all with your DP because you are now one unit.
Unfortunately, it's very hard to really understand all this until you're living it. It doesn't make you selfish. It just means you didn't understand what you were getting into fully. Where you go from here is something you will have to negotiate just like every other blended family out there.