Tax Credit system undermining family stability

Briefing: further to our earlier post here.

From CFNews: Tax Credit System undermining Child Development. Research recently published by CARE shows that the current tax credit and wider benefits system is creating a financial incentive for couples on low to modest incomes with children, to live apart. Given that the social science research in the field makes it abundantly clear that child development interests are best served in the context of two parent families, the provision by the state of a fiscal incentive for a less effective child development environment seems very unfortunate. This policy appears particularly out of place given the fact that the government has made confronting antisocial behaviour a policy objective and has identified that one of the main reasons for failure in this area relates to the poor parenting experiences of disaffected youths especially during their early childhood years. There is an urgent need for a review of tax credits and the wider benefit system to ensure that they do not have the effect of discouraging two parent families.

`Families Compared', written by Don Draper, is a case study considering the impact of the tax credits and wider benefits system on 98 low to modest income families. It shows that in over 70% of cases the couple would be financially better-off - on average by £64 per week - if they lived apart, even when additional housing costs are taken into account. The research also shows that there is a substantial cost to the Treasury resulting from a couple's decision to live apart. whether this results in a family breakup or the couple deciding not to live together in the first place.

'Restructuring Tax Credits.' written by Don Draper and Leonard Beighton. looks at the problems considered in the case study on a general UK level, exploring possible solutions. Recognising that current projections suggest that in the near future more than 50% of children in poverty will live in 'in-work' two parent families, the paper argues that targeting increases in tax credits at 'in-work' two parent families in poverty will be crucial if the government is to find a credible way of making any progress towards its goal of halving child poverty by 2010 and if family life is not to be further undermined.

To obtain a copy of either paper please telephone 020 7227 4717 or visit www.care.org.uk. [CARE]

Also from CFNews: Nearly one in four children in Britain now lives with only one parent, according to a new report on social trends. The number of such households increased from four million to 11 million between 1972 and 2005. A fifth of the children who saw their parents divorce in 2005 were 10 or less. And one in 10 families with dependent children now involves a step-parent. Although the population is growing, family sizes are shrinking. Households comprising a couple with dependent children have decreased from 52 per cent to 37 per cent. Among such families, those from a black ethnic background had the highest numbers of lone parents -- up to 50 per cent in some communities. But what children are missing in parent contact they are making up in technology. Around half of children aged 8 to 11 own a mobile phone. As for the adult population, more of them are living alone -- seven million in 2005 compared with three million in 1971. The largest increase in solo living is amongst those aged 25-44. ~[Telegraph]