This week’s budget included some welcome short-term relief for families. However, a critical long-term issue remains unaddressed: the “couple penalty” embedded within the welfare system. This penalty significantly disadvantages couples who choose to commit, costing them thousands of pounds annually and weakening family structures.
Let’s acknowledge the positive adjustments to Universal Credit. The reduced taper rate, allowing low-income families to keep 45p for every extra £1 earned (up from 37p), is a step in the right direction. The inherent challenge of welfare systems lies in the “iron triangle”: benefits must be reduced as income rises. Withdraw them too sharply, and work becomes financially unviable. Withdraw them too slowly, and benefits extend to higher earners, straining resources. Iain Duncan Smith’s long-held principle that Universal Credit should incentivize work is finally gaining traction, which is undoubtedly positive.
Furthermore, the Chancellor’s commitment to establishing Family Hubs, championed by Dr. Samantha Callan and Lord Farmer, is noteworthy. Whether these hubs can surpass the mixed results of their predecessors, Surestart Children’s Centres, is yet to be seen. Evaluations of Surestart indicated benefits for parents but not consistently for children. Two key shortcomings were identified: a lack of rigorous, evidence-based program trials and insufficient integration with the established NHS ante-natal system. Many parents simply didn’t utilize Surestart centers. My own experience running relationship courses for new parents within the Bristol ante- and post-natal systems confirmed this. Addressing these issues is crucial for Family Hubs to achieve their potential.
However, the persistent and detrimental “couple penalty” continues to be overlooked. Two-parent households offer significant advantages in managing family life. While government influence over relationship dynamics may be debated, policy can certainly either support or undermine couple commitment.
Firstly, marriage demonstrably strengthens couple stability compared to cohabitation. Skeptics may attribute this to pre-existing differences in those who marry. However, the benefits of marriage are evident across income and age groups, even when comparing similar demographics. Psychologically, the act of commitment inherent in marriage fosters behavioral changes. Shared decisions and future plans signal intent and reduce uncertainty, strengthening the partnership. The public affirmation and social support received through marriage further reinforce commitment. While cohabitation can offer some of these advantages, marriage inherently provides a stronger foundation.
Secondly, the welfare system itself creates a significant barrier to commitment and marriage. Benefit eligibility is determined by household income. Adding a partner or spouse’s income increases the household total, leading to benefit reductions. This creates a powerful financial disincentive to cohabitate or even acknowledge cohabitation. For married couples, spousal income is considered even without co-residence.
While a marriage tax allowance offers a potential £272 benefit, this is dwarfed by the potential loss of up to £10,000 in Universal Credit due to the “couple penalty.”
It is unsurprising that family breakdown is most prevalent in the early years of parenthood. Since the introduction of tax credits in 2004, the government has effectively penalized couple commitment, creating the “couple penalty.”
What can be done?
The “couple penalty” needs urgent discussion and reform. For years, organizations like the Marriage Foundation and academic research have highlighted this issue. It is crucial to engage with Members of Parliament to advocate for policy changes that remove this disincentive and support stable family structures. The current system inadvertently undermines the very relationships that provide the strongest foundation for raising children and building a thriving society.
