More state cash for singles, says report

The majority of people would receive more state help if they were single rather than part of a couple, a report claimed today.

The Institute for Fiscal Studies said around 68% of people would get greater financial support through tax credits and benefits if they were single, or claimed they were, compared with if they were married or living with a partner.

The group said "couple penalties" in the tax and benefit system arise because much state support is means-tested against the joint incomes of a couple, rather than just an individual's income.

It said the problem could be reduced by increasing benefits and tax credits for couples, or reducing them for single people, but it added that it would be almost impossible to eliminate the issue altogether.

The IFS estimates that the average couple would receive around £45 a week more in state aid if they were single, although one in 10 people would be at least 20% better off.

But it added that the study failed to take into account the fact that people who live together share the cost of running a home.

The research found that couple penalties are mostly caused by income support, Jobseeker's Allowance, the pension credit and child tax credits.

It said the main cause of the problem is that people who would be entitled to certain benefits if they were single, are not entitled to as much, and in some cases anything, if they live with a partner who has an income.

The group also pointed out that for most means-tested benefits, the maximum entitlement for a couple is less than twice the amount a single person would receive.

Other benefits, such as housing benefit and winter fuel payments, also assume that a couple spend the same amount on their housing costs as a single person.

But there are some taxes and benefits that favour couples over single people, such as the married couple's allowance for people born before 1935, while couples can typically save on council tax by living together rather than apart.

The tax and benefits system is also neutral for couples if neither of them would qualify for state help if they were single, which is most likely to be the case for couples who are well off, or those of working age without children.

Overall, the group estimates that 68% of people would get more state help if they were single than if they were part of a couple, while 4% would get less help and 27% would receive the same level of benefits.

But 95% of working age couples with children are worse off because of their status, as are 81% of pensioner couples.

The IFS study also found that the reforms to the tax and benefit system introduced since 1997 have increased the amount of money people lose because they are part of a couple.

But it added that eliminating all couple penalties and premiums would cost around £34 billion a year, based on the current level of tax credits and benefits available to single adults.

The group also found that the impact the three main parties' tax and benefit proposals would have on couple penalties is "very small".

The number of people who faced a couple penalty would not change under the Government's plans, and would fall by only 1% under the Conservatives and 2% under the Liberal Democrats.

The size of the average penalty would also be broadly unchanged, dropping by only 0.2% under the Government, while it would rise by 0.4% under the Conservatives and 3.1% under the Liberal Democrats.