A newly introduced cap on benefits could encourage couples to separate, the Institute for Fiscal Studies has warned.
From today, families claiming benefits in London boroughs of Haringey, Croydon, Bromley and Enfield can claim a maximum of £500 per week, while single people can claim a maximum of £350. The cap is designed, the government says, to ensure people on benefits do not receive more than the national average salary. It will be rolled out across England and Wales from July.
Secretary of State for Work and Pensions Iain Duncan Smith said the cap was central to the government’s benefit reforms:
“It will provide clear incentives for people to get into employment and will give taxpayers the assurance that high claims out are no longer possible. We have also ensured vulnerable people are protected with clear exceptions for people claiming disability benefits.”
Now in analysis of the possible social effects, economist Robert Joyce has claimed that the cuts could lead “…fewer people to cohabit, since the benefits cap is to apply at the household level, and hence living apart could split benefits across households and mean that neither is subject to a cap.”
He added:
“This ‘couple penalty’ is presumably something the government would not be keen on, as it has said that it wishes to reduce couple penalties in the tax and benefit system.”
