Single mother gets £100 more in tax credits a week than working couple
Single parents on the poverty line are getting over £100 a week more in state benefits than couples facing the same difficulties, a new report says.
The huge difference in the treatment of single parents and married couples is plunging millions of children into poverty and encouraging couples to live apart or break up, it said.
The study found that the majority of children passed as poor now come from two-parent homes and increasing numbers of two-parent families will face financial difficulties in coming years.
The report, produced by the family charity CARE, comes at a time of growing concern about the built-in bias towards single mothers in the benefits system.
Lone mothers qualify for special rights to get housing, extra payments in benefits like Income Support, and are targeted by schemes like Sure Start that provide help, advice and childcare.
But the greatest unfairness to couples trying to stay together and bring up children comes from tax credits, the flagship benefit system developed by Chancellor Gordon Brown to reduce child poverty, the report said.
It found that couples have to work nearly five times as long as single mothers to reach the income line where the Government says they have escaped poverty.
And to get there single mothers will be given £132.79 a week from the state in tax credits - over £100 a week more than the £29.55 in tax credits that the couple will be given.
The analysis is based on the level of income that, according to the Department of Work and Pensions, was the poverty line in the financial year 2004/5.
For a single mother with two children living in a council house, the poverty line would have been £186.
A couple in the same circumstances, however, would have needed £325 to be out of poverty because of the living costs of the extra adult.
The difference is built into the tax credit system, because tax credits are paid to only one parent and do not pay anything to cover a second adult in the family. Two-parent families where the mother stays at home to bring up the children instead of going out to work are particularly hard hit by the system.
In 2004, the single mother would have needed to work for 16 hours at the then minimum wage of £4.50 a week to qualify for working tax credit. She would then have been paid £132.79 in tax credits, taking her income to over £200 a week, well over the £186 poverty line.
The couple, however, would have to work 74 hours between them at the minimum wage to reach an income after tax and deductions of £325 a week. To help them, they would have received just £29.55 in tax credits.
The charity's report was produced by two fiscal policy experts, former Inland Revenue advisers Don Draper and Leonard Beighton.
It said: "We recognise the needs of long parents but couple families on the poverty line have been getting less than £30 a week in tax credits whereas lone parent families in similar circumstances have been getting over £130 a week.
"Many couples with children who are currently living apart find that because of tax credit rules they would face a substantial drop in their joint incomes if they marry or even live together. We are very concerned that this may be discouraging the formation of stable families."
Children from single parent families are much more likely than those with two parents to suffer poor health, do badly at school, fall into drug abuse and crime, and become jobless or single parents themselves.
The report from CARE said that in 2005 two million of the 3.4 million children judged to be living in poverty were living with both their mother and father. By 2010 it, said, the number of children in couple families living in poverty is likely to have risen to 2.1 million, of whom 1.8 million will be in families were at least one parent works for a living.
