2 parent families discriminated against

A new report by Reform looks at child poverty and the welfare system in the UK. The authors are Labour MP Frank Field and former Civitas researcher, Ben Cackett.

The report finds that there has been no change since 1997 in the numbers of children in severe poverty. It argues that the Government's policy is biased against two parent families, that the tax credits system is badly designed, and that it discriminates against two parent families.

Because of the discrimatory tax credits system, single parents are discouraged from marrying or "declaring" existing partners.

If poverty is defined as households whose income is 60% of median income, there has been some reduction in poverty. However, the report finds that if a lower threshold is taken, that of 40% of median income ("severe poverty") then there has been hardly any change at all since 1997.

The tax credits system has helped to bring about a significant reduction in poverty for children living in single parent households. However, there has been no change in the risk of poverty for those children living in two parent households. The report points out:
"Although the risk of poverty is lower in two parent households, their greater number overall means they represent a larger proportion of all children in poverty: 60 per cent of children in poverty live in two parent families; as compared to 40 per cent in lone parent families. In fact, two parent families in work account for the largest single group of poor children"
It goes on to explain why:
"A significant reason behind the changing risk and composition of child poverty for different households is the Government’s tax credit system. Children in working two parent households in poverty are brutally discriminated against."
They give the figures which are quite startling:
"[...]two parent households need far greater earnings than a lone parent to move past the poverty line. In 2004-05, two parents with two children had to earn £240 a week to have a net income of £295, to lift themselves above the poverty line. By contrast, a lone parent with the same number of children needed to earn just £76 a week to gain a net income of £230, £5 above the poverty line."
One of the conclusions of the report is:
"There is a single immediate step the Government should take. Any new money for the tax credit system should be used to lessen and then abolish the system’s discrimination against two parent households."
Full report Welfare isn't working: child poverty (332 Kb pdf)
Bulletin with summary of the report

H/T Fr Ray Blake

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