News

Parents better off single and on the dole

A new report published today claims that parents are financially better off separated and claiming benefits.

The report from the Centre for Policy Studies (CPS) says that current tax and benefit legislations mean that lone mothers on benefits have the same standard of living as hard-working families.

The study claims married or co-habiting couples on average weekly earnings are better off by only £1 per person compared to a single parent who has never worked. It also says that the state would increase their income by between 35 and 65 per cent if they were to split up.

Jill Kirby, author of 'The price of parenting', reports that the financial penalties on couples who bring up children together have been growing at the same time as the birth rate has fallen and the biggest drop in birth rate has been among families of around average income.

Ms Kirby, a policy analyst who writes and broadcasts on family issues, also says that the level of public subsidy to households with children has doubled since 1997, and now stands at £22 billion a year. Yet for many ordinary families, the price of parenthood is too high.

The report calls for the benefit system to be remodelled along the lines of President Clinton's reforms of the 1990s, which have cut US welfare dependency by half and teenage pregnancies by nearly a third.

Cambridge economics professor Robert Rowthorn found, "Britain will soon be the lone-parent capital of the world. The percentage of children who are living in a one-parent household is now much higher in Britain than elsewhere in Western Europe and we are about to overtake the United States."

Professor Rowthorn added, "Step by step, governments have been nationalising the means of reproduction. Instead of taking over failing industries, they are now taking over failing families, whose number is growing by the day.

"All this is done in the name of social justice and for the good of children. But where is the justice in a system that penalises intact couples and subsidises lone parenthood? How can such a policy be in the general interest of children?"

The tax credit system, introduced in 1998, pays benefits and childcare subsidies to lower income and jobless parents. But Ms Kirby said the tax credits were not real tax breaks, which allow people to keep money they earn, but old-fashioned means-tested welfare benefits in disguise.

She added,"The bias against two-parent families must be removed and a system of genuine tax allowances introduced to replace the complex, expensive and unfair tax credit system."

• Do you think tax credits work for all families? Share your views in Discuss, Debate and Deliberate