Tax system is incentive for parents to separate

The current tax system means parents are financially better off if they split up, a new report shows.

Parents are effectively penalised for living together, the study from think-tank Civitas shows, with some left more than 20 per cent poorer.

Government policies have led to the “perpetuation of single-parent families”, the report claims, with one in five of those who stop receiving benefits doing so because they move in with a partner.

“For many their decision to live together is a triumph of romance over economics”, the report says.

Sean and Chloe Ash decided to separate last year when they realised how much they would benefit financially.

Living together, the couple, who have a two-year-old son, received £1,702 per month between them in welfare payments.

However, their overall monthly income dropped by over £200 per month when Mr Ash got a job with an annual salary of £22,000.

Now they live apart, the combination of Mr Ash’s salary and the benefits received by his wife means the couple’s income has risen by £1,108 a month.

Mr Ash said: “There’s no point in us being together if we get more money by living apart. It’s ridiculous.”

Responding to the Civitas report, shadow work and pensions secretary Chris Grayling called the situation “insane”.

He said: “Britain suffers massively from the problems caused by family breakdown.

“It is little short of insane that we have a tax and benefits system that encourages couples to live apart rather than together.”

A Government evidence paper recently outlined the negative outcomes associated with lone parenthood, but stopped short of recommending policies to encourage marriage.

Children of lone parents do less well at school, according to the paper. Seven in ten young criminals come from lone parent families, despite the fact that these make up just a quarter of all families with children.

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