The couple penalty: the perverse family policy that penalises commitment

In the budget this week, the Chancellor announced a couple of things that will benefit quite a lot of families in the short term.

In the budget this week, the Chancellor announced a couple of things that will benefit quite a lot of families in the short term. But in failing to address the couple penalty in the welfare system that massively penalises couples who commit, to the tune of £,000s per year, he has neglected the long term.

First, let’s acknowledge the important change to Universal Credit. Reducing the ‘taper’ now means that for every extra £1 earned at work, families on low income get to keep 45p instead of 37p. The biggest problem with welfare has always been what is known as the ‘iron triangle’. One way or another you have to take benefits away as people earn more from work. Withdraw benefits too fast and it’s not worth working for just a few pennies in the pound. Withdraw too slowly and you end up still paying benefits to people earning £30,000-plus, which makes no sense. For years Iain Duncan Smith, architect of the UC system, has insisted UC must make work pay.  He’s finally got his way. That’s good news.

Second, the Chancellor has also promised a pile of taxpayer cash to set up Family Hubs. This is the longstanding brainchild of my old colleague and friend Dr Samantha Callan and her boss Lord Farmer. Whether these new hubs can be made to work better than their predecessor Surestart Children’s Centres remains to be seen. The national evaluation of Surestart found centres benefited parents but not children. There were two reasons for this. One, there were never any random trials to make sure centres ran the best possible evidence-based programmes with stuff that actually made a difference to children. And two, Surestart was never properly connected to the very popular NHS ante-natal system. Far too few parents ever made use of the centres. When I was running hundreds of relationship courses a year for new parents in the Bristol ante- and post-natal systems a few years back, I saw the evidence of this at first hand. Correct those two issues and Family Hubs are in with a chance.

But the issue that remains completely ignored is the couple penalty that massively penalises commitment among low income families.

Family life is a whole more doable if you have two pairs of hands rather than one. Maybe the government thinks it has no control over whether couples make life work together or not. But they are wrong.

First, couples are more likely to stick together if they get married rather than merely coexist. Sceptics will always claim this is about the kind of people who marry. But marriage carries advantages across all income and age groups, even when you compare like with like. And there are good psychological reasons for thinking the act of commitment that leads to marriage changes the way people behave. Mutual decisions and plans send clear signals to one another about intent that reduces any lingering ambiguity or doubts. That’s important. And the public affirmation and social support of family and friends on the day also matters. Commitment is a risk. You need a bit of affirmation for taking it. You can get these advantages if you cohabit. But you necessarily get them if you marry.

Second, one of the biggest barriers to commitment, let alone marriage, is the welfare system. It’s very simple. What you get depends on your household income. Add the earnings of a partner or spouse, income goes up, welfare goes down. So there’s a huge disincentive to live together or even admit you live together. And if you are married, you have to include your spouse’s earnings even if you don’t live in the same household.

Live together and marry and you can get up to £272 from the marriage tax allowance. But do that and the government will then take away up to £10,000 from you in Universal Credit.

No wonder so much family breakdown happens in the earliest couple of years of parenthood. The government has been actively penalising you for being committed since 2004. That’s when tax credits were introduced and the ‘couple penalty’ first arose.

What would you do?

We need to talk about the couple penalty. I’ve been talking about this for years and will continue to do so, both for Marriage Foundation and in my PhD on why so few of the poorest get married. I hope you will talk to your MPs about it.

Harry Benson, Research Director Marriage Foundation and social policy PhD student at University of Bristol


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