Aiding Family Break-Up – Literally?

Aiding Family Break-Up – Literally?

Daily Mail – January 2, 2009

David Cameron today attacked ministers' failure to protect the family after it emerged that couples with children can become more than £5,000 a year better off if they split up or choose to live apart.

A study by the Civitas think-tank shows how millions of working families are missing out on the benefits paid to single parents.

Today the Conservative leader said the report exposed the 'madness' of Government benefits policy and its failure to protect the family.

He said: 'What a crazy thing for a country to be saying to people when we all know that family breakdown has such terrible consequences. Split up and be better off – what a crazy thing for the family to do – it is madness that we have this approach and Gordon Brown needs to change it.'

Mr Cameron said the Conservatives would aim to reverse any penalties against being married.

'We would abolish the couple penalty by giving couples £38 more a week. Big difference and takes a lot of children out of poverty. And it ends this dreadful signal that we are sending to Britain’s families.'

The report cites the example of a lone mother who earns £10,000 a year and her partner who earns £25,000.

Because benefits and tax credits are weighted in favour of single parents, they will be £5,473 a year better off if they live separately - or tell the authorities they do - rather than living together.

Similarly, a lone mother who does not work and her partner who earns £20,000 will find themselves £4,522 a year worse off if they marry or live together.

For those who do decide to wed or live together the decision is 'a triumph of romance over economics', the report claims, and many more are put off by the 'powerful economic incentives to live separately.'

Gordon Brown's tax credit system - introduced in 1998 with the aim of lifting low-income families out of poverty - also discourages part-time employees from increasing their hours or finding a better-paid job, it says.

David Green, the author of the report, writes: 'It was right to aim to provide a guaranteed income to every person who fell upon hard times, but we have chosen ineffective and sometimes counter-productive methods that tend to discourage self-sufficiency.'

Figures from the Office for National Statistics and the Institute for Fiscal Studies suggest widespread fraud, with the Government paying out benefits to 200,000 more single parents than there are estimated to be in Britain.

Labour's 1997 election manifesto promised to 'strengthen family life', adding that 'the breakdown of family life damages the fabric of our society'.

But once in power the party abolished the Married Couple's Allowance - the last remaining tax break for husbands and wives - and introduced a system of tax credits which favours single mothers over couples.

Since then the number of lone parents families in Britain has soared and is approaching two million

Civitas's report, entitled Individualists Who Co-operate, argues for a substantial shift in the benefits culture, with a far greater emphasis on 'restoring independence.' job', adding that income support for a jobless couple with two young children rose by 31 per cent in real terms between 1997 and 2003.

The report also shows how families earning just above the average income of £25,000 receive almost exactly the same in benefits and public services such as healthcare and education as they pay in taxes - around £10,500, it claims.

It argues they should be allowed to keep far more of their income and spend it as they see fit on privately-provided services.

Earlier this week the Mail reported that an astonishing 140,000 households across Britain are pocketing more in benefits than the average take-home wage.

Tory work and pensions spokesman Chris Grayling said: 'Britain suffers massively from the problems caused by family breakdown, so it is little short of insane that we have a tax and benefits system-that encourages couples to live apart rather than together.

'This is something the Conservatives are committed to changing.'

Tory leader David Cameron has promised tax breaks for married couples in an attempt to stabilise the family - a move dismissed by Mr Brown as an 'ideological judgment'.

But his party's planned £1,000 tax boost is now subject to a rethink, amid growing doubts over how it will be funded.

A Treasury spokesman said: 'The Government makes no apology for targeted policies that have lifted over 600,000 children out of poverty, and greatly reduced the tax burden on working families.

'In fact, as a result of tax and benefit changes since 1997, four out of ten families now pay no net tax.'


Case study

For couples with children where the mother does not work, the benefits of living apart can be even greater.

Sean Ash and his wife Chloe separated last year after they realised how much their finances would benefit.

The couple - who have a two-year-old son called Dylan - used to have a joint income of £1,702 a month from state handouts.

But when Mr Ash, 26, started a £22,000-a-year job, the drop in benefits would have meant their monthly income fell to just £1,472.

Now Mr Ash takes home £1,184 a month and his wife gets £1,396 in benefits, meaning their income is £1,108 a month more because they are leading separate lives.

He said: 'There's no point in us being together if we get more money by living apart. It's ridiculous.'

Mr Ash added that he found it bizarre that the couple would also have been better off together if he did not have a job. 'Surely if you work you expect to earn more than you'd get on the dole,' he said.

The couple's previous joint income of £1,702 a month included income support, child tax credit and benefit, housing and council tax benefit and £800 for rent on their flat in Lewisham, South-East London.

If the couple had stayed together, Mrs Ash would only have qualified for child benefit of £78.43 a month. She said: 'It was the straw that broke the camel's back.'
www.dailymail.co.uk/news/article-1104024/Cameron-attacks-madness-parents-getting-benefits-decide-split.html