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Last Updated: Friday, 21 January, 2005, 11:07 GMT
Benefits 'encourage separation'
Father with child
Families are encouraged to split, the report says
A state benefit system "encouraging lone parenthood" penalises two parent families, a new report has claimed.

They are barely 1 a week per head better off in benefits than a single household, the right-leaning Centre for Policy Studies argues.

Yet when parents split up, the state increases their income by between 35% and 65%, its report said.

But a Treasury spokeswoman criticised the report as "predictably selective and misleading."

The authors argued that the benefit system was helping to turn Britain into the single parent capital of the West. The amount of public subsidy spent on households with children had doubled since 1997 to 22bn a year, according to the report.

But many people felt they were losing out because they were in two parent families, said author Jill Kirby.

Child maintenance

The proportion of children growing up with one parent had increased by a quarter since Labour's election victory in 1997.

The report claimed that a "typical household" consisting of two parents and two children, with an income of 24,000, is just 1 a week per head better off than a single parent family entirely dependent on benefits.

The more money is spent on subsidising lone parents the greater incentive there is for couples to break up
Bob Rowthorn

Parents are better off collectively if they split up, the report says.

Their weekly income after tax and housing costs increases by 35% from 223 to 301, if the husband pays child maintenance.

It can rise by 65% to 369 if he ignores the law and evades it.

The taxpayer spends between 8,450 and 12,000 a year when couples separate, the report suggests.

A single parent household raising two children on benefits costs taxpayers more than 11,000 in payments alone.

However, the Treasury said the report had "deliberately" set the income for Mr and Mrs average lower than the actual average for two parent families, so they would miss out on such benefits as child tax credit.

She added: "As a result of our reforms to the tax and benefit system since 1997, by April families with children will be on average 1,300 a year better off."

The overall effect is to undermine the family, Cambridge Economics Professor Bob Rowthorn writes in the report foreword.

He writes: "By encouraging lone parenthood, it is also corroding the social fabric.

"The present system feeds on itself - the more money is spent on subsidising lone parents the greater incentive there is for couples to break up."

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