MSE News: Benefit cap has 'couple penalty'

Former_MSE_Helen · 3 February 2012 at 5:32PM

This is the discussion thread for the following MSE News Story:

"The Government's benefit cap may create a 'couple penalty', encouraging couples to live apart, says the IFS ..."

Read the full story:

Benefit cap has 'couple penalty'

Somerset · 3 February 2012 at 6:01PM

I've read enough posts on here about partner's who don't live together but still have their benefits stopped because they are deemed to be a 'partner' and co-habit. What's the difference ? If 'he' lives there and 'she' lives there, won't the benefits people say it's an artifically contrived situation and they are not two separate households.

Below is one but there have been many similar.

https://forums.moneysavingexpert.com/discussion/3740867

rotoguys · 3 February 2012 at 6:25PM

To be honest, this I believe already happens regarding taxation and where considerable income could be a problem should there ever be a divorce.

There was a 'legal' definition given to this as far as tax is concerned 'MWLA' - Married Woman Living Apart.

I have no problems with how people set up their relationships to either reduce or eliminate the tax burden and to protect assets in a divorce action.
That sort of action has been going on since the mid 60's that I know about.

Now with the introduction of capping benefits etc, of course people are going to arrange their affairs in such a way that it doesn't apply to them.
Are benefit claimants any worse than businessmen, the likes of Sir Philip Green who actively promotes ways of increasing their worth?

No not really.

There is nothing sad about it - everybody has to move with the times.
What annoys me is that as soon as 'benefit claimants' are mentioned, all sympathy is lost. They are not the 'scum of the earth'! If they are, then 95% of MP's, the vast majority of the Lords and most sucessful businessmen, pop stars and superstar sports people are as well!!

rogerblack · 3 February 2012 at 6:29PM

copa_feela wrote: »

No one would be forced to live apart, some may choose to do so. Sadly whatever the government do, there will always be people that stoop so low in order to maximise their entitlement. These are the people that give all other claimants a bad name.

In many places in the country, especially for couples with several children, it will not be possible to find accommodation cheap enough to avoid breaching the benefit cap.
For some by a significant enough margin that the shortfall means that even with scrimping and saving, the couple cannot run a joint home.

Especially for couples that are staying together 'for the children' - it may be the tipping point to make them reconsider their situation, and consider that moving out of the area, losing contact with relatives and people who may help them into work, is more of a negative factor for the children than splitting up.

rotoguys · 3 February 2012 at 6:35PM

Somerset wrote: »

I've read enough posts on here about partner's who don't live together but still have their benefits stopped because they are deemed to be a 'partner' and co-habit. What's the difference ? If 'he' lives there and 'she' lives there, won't the benefits people say it's an artifically contrived situation and they are not two separate households.

Below is one but there have been many similar.

https://forums.moneysavingexpert.com/discussion/3740867

Maybe because they haven't thought through how to achieve it properly.

You can still be in an active relationship which may even be years long, yet legally be treated as single people.
It all depends on the facts and circumstances of the case.

All it requires is that both parties can show that they have responsibilities to two different homes. That there are no financial links. And if they are married, that a Separation Order is sought.
Yet they may sleep together for 5 out of 7 nights and may even be parents of the same child(ren).

This is once again vilifying benefit claimants yet condoning pop stars, businessmen etc who do the same thing to avoid paying tax.

wonderpupp · 3 February 2012 at 7:06PM

I really dislike this entitlement to benefits just for spawning children.
Apologies if I sound trollish here; but it is much easier to afford to rent somewhere if you are sharing the bills. the difference in amount of benefits would not be enough to actually pay to live somewhere else. Funds would be sucked from home A to home B and both "houses" would be strapped for cash, even moreso.

So maybe these couples aren't so dumb and maybe, just maybe, they will look at the situation as a whole, and maybe one of them will go get a job.

For the record, married, no kids, renting, both working and enjoying being child free

Somerset · 3 February 2012 at 8:22PM

rotoguys wrote: »

Maybe because they haven't thought through how to achieve it properly.

You can still be in an active relationship which may even be years long, yet legally be treated as single people.
It all depends on the facts and circumstances of the case.

All it requires is that both parties can show that they have responsibilities to two different homes. That there are no financial links. And if they are married, that a Separation Order is sought.
Yet they may sleep together for 5 out of 7 nights and may even be parents of the same child(ren).

This is once again vilifying benefit claimants yet condoning pop stars, businessmen etc who do the same thing to avoid paying tax.

No, If you read the link I posted, the individuals had their own separate homes/bills and no financial links. Basically they had a semi-casual relationship where they slept together, spent time together but hasn't reached the 'commitment' point of wanting to move in together. They were legally single people but the poster, on benefits, had her benefits stopped because the DWP decided they were a couple.

My point is, if the DWP can decide the above, they can make the same decision re 'break-up's' post the benefits cap. The implication of the article was 'this is a way around it' - separate households, but the DWP seem to be a law unto themselves in deciding that separate households are an artifical device where they deem a partnership exists.

At least, I can't see the difference between the link where they genuinely weren't a couple (yet, maybe) and the scenario in the article. I don't think the DWP apply 'normal' standards - so those same abnormal standards could equally applied in the article scenario.

cootuk · 3 February 2012 at 10:28PM

As a working man with family, please where can I apply for £500pw after tax as it would be a big step up from my takehome pay?

vax2002 · 3 February 2012 at 10:31PM

If you work in ANY form that is connected to local government or deals with customers employed in local governement, you may find out.
Only 5% of the required cuts have been made, the Axe is really going to start falling after April.
So, dont be totally smug, the knock on effects will not have many places where they are not felt.

furndire · 4 February 2012 at 12:37AM

Couples are already only entitled to rent for 1 bedroom properties if they need to claim rent after losing their jobs. Tough if they live in a 2 bedroom property.
If they live apart they can have 1 bedroom each - and medical grounds for needing 2 bedrooms are not taken into account.
Things are definitely going to get worse after April. People who already get their rents paid will only be affected if they have to make a new claim.

cit_k · 4 February 2012 at 2:29AM

I pointed out this was likely to happen a very very long time ago when the proposals were first muted...

MSE News: Benefit cap has 'couple penalty'

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