Is £150 a year for married couples a good idea?

Anna Lines, FTM chair

Most people – including political commentators and non Tory voters – seem to think the married couple allowance is a bad idea. 

For this, I blame the Conservative Party itself, for not even David Cameron seems to have a full understanding of what this is actually about.  He talks about a tax allowance for married couples, because he wants to recognize in the tax system the importance of marriage.

What he should say emphasize is that this £150 p.a. arises from a transfer of £750 from an otherwise unused Personal Allowance of £6,000 pa.  This only applies to married couples where one spouse does not earn or earns very little (less than £5,250 p.a.). 

Would this apply to a no-married couple on only one income?   No.

Would this apply to a two-income married couple?  No.  Such a couple already enjoys considerable fiscal advantages because the spouses each have a Personal Tax Allowance of £6,000. Such a couple would not “lose out”; matters would remain as they are now.

An older married couple on a single income (below higher rate tax)?  Yes, they would stand to gain under this arrangement.  A quite elderly married couple?  Born before 1935, they never lost their Married Couple’s Allowance when all others lost theirs.

And how unfair is this to widows and widowers?  No more “unfair” than it is to single people.  Where there are children then there is Child Benefit etc., but where just one person remains in the household there are no dependants at all.

FTM gives this proposal a modest welcome.  We have campaigned for many years that an unused Personal Tax Allowance should be fully transferable. We are even moving up a notch and argue that the fairest way to tax families would be to allow them to split their  incomes (be they earned by one or two people) in equal halves for tax purposes.

Only that way would families then be on a par in fiscal matters.

So what are we to make of this allowance worth £150 a year?  Family policy in this country has become a very tangled, like a traffic jam around Paris’s Arc de Triomphe in the rush hour.  There are eight exits and here you are in your little car, a complete stranger to this city.  You have a rough idea into which direction you should be steering, but are boxed in by honking drivers.  So what do you do?  You are nowhere near that exit yet, but you nevertheless switch on an indicator, smile nicely at the other drivers and get your passenger to put out an arm through the window on the other side.  That’s the point that David Cameron and George Osborne are at now.

Give them a bit of time and space and hopefully they will get out of this mire of family policy and eventually reach their destination.

Go to https://ftmuk.wordpress.com/income-splitting/ for more on income-splitting.

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9 Responses to “Is £150 a year for married couples a good idea?”

  1. D Austin Says:

    Agree wholeheartedly with this sentiment “We are even moving up a notch and argue that the fairest way to tax families would be to allow them to split their incomes (be they earned by one or two people) in equal halves for tax purposes.”

    It really irritates me that because I earn £49k I get taxed at 40% but 2 income families can earn £60k and be have significantly more disposable income – whereas I get hit with every tax going and miss out of evry benefit proposed by all parties.

    • Esther Peacock Says:

      I also find income splitting an appealing idea, as it appears to me to signal support of equal opportunities in a way that puts more emphasis on the job of a mother (or parent at home) than the transferrable tax allowance. But that is not what the Conservatives are offering.

      As someone who generally votes in favour of liberal and/or socialist policies rather than conservative ones, I personally am not convinced that the married couples tax allowance is an indicator that the Conservatives are headed out of the mire in the right direction; maybe it is an indication that they are tempted to do a U-turn! This is a policy in support of marriage. Whether it also supports mother-at-home families (which I don’t deny it will do) can surely not be taken as an indication of the politics behind it? Maybe this is why Anna feels that David Cameron doesn’t appear to have a clear understanding of what it will mean to families – he certainly wouldn’t want to put anyone off who might vote for him in the mistaken belief that he developed this policy in support of them!

      I am pleased to see such a debate opening on this website, and certainly don’t want to throw a spanner in the works, as I welcome reflection from an FTM perspective on how the various party policies affect families as we prepare to vote. But as an “active” member of FTM I would like to urge caution: I think we must be careful to emphasise that FTM itself does not have a “party line” (pun intended!)

      I also understand that this article was probably written as a reaction to the bad press being given to the marriage allowance in the UK, and therefore could be considered to be providing a balance for anyone affected by the opinion of the British media. FTM continues to have my full support.

  2. Bo C Pettersson Says:

    Dead right Mrs Lines!

    We in my org (Children’s Right to Their Parents Sweden, http://www.barnensratt.se/index-en.htm) take your Income Splitting idea a further notch up to something we call Family Taxation.

    The idea is that the family itself, not the two parents, be the taxation subject and that all income-necessary expenses (such as for child care) be tax deductible [1]).

    Imagine the social effect – on how spouses view their marriage and one another, on divorce rates, on public perception of the value of home making [2], on child-parent bonding, and on adolescent misbehaviour later!

    Not to speak of the the macro-economic and civil-liberty-related advantages!

    Footnotes:
    1) This obviously presupposes that all tax subsidies, currently going to industrial-scale child-care, be abolished.
    2) Charge-out of child care at cost price would, in addition to its market-economy-related benefits, go a long way towards exhibiting home making at its true macro-economic value, i.e. reduce or even eliminate the stigma currently attached to home making (and the poor self-esteem many home makers suffer from).

  3. Marie Says:

    I agree that Income Splitting would be far far better. It’s more expensive of course and in these times of economic uncertainty/, well I guess they just can’t afford to consider ‘one notch up’.
    I met with my local Conservative MP last year and questioned him about the marriage tax . I pointed out that instead of promoting it as something ‘extra’ that singlies don’t get, which it really isn’t (single parents access other much needed benefits) they should really clarify once and for all that it is all about ‘restoring balance’ to the system and getting rid of the completely unfair couple penalty – this would have caused less confusion from the outset. It’s crazy that some parents don’t tie the knot cos they’d actually be financially worse off than previously. And some mothers who sadly (or happily sometimes, depending on personal circumstances) get divorced , suddenly find themselves eligible for all sorts of much needed support/housing/tax credits etc as a ‘single parent’ which they didn’t get when married and completely invisible in the system – blimey as a mum at home you can’t even access training courses if your husband’s salary is half reasonable despite having lost your own entire salary in order to care for children – the most important job in the world.
    So you’re married when it suits them for withholding support, and then sometimes they prefer to consider you unmarried/independent for taxation purposes – the taxman wants its cake and wants to eat it too.

    Even more importantly the Tories should have emphasized that the marriage tax is to help only couples with children to bring up, in recognition of the extra responsibilities/costs that come with raising a family and the time investment this entails from the caregiver just when more income is needed. I don’t think it makes sense to offer it to civil partnerships unless they have adopted children of course.

    ‘Marriage’ would be the ‘ticket’ to eligibility for a tax break for families (practically speaking the adminstrators/taxman would need some easily verifiable ‘eligibility criteria’ before handing out the money ) but it wouldn’t be ‘the core reason ie the core reason should be the extra responsibility of raising children and the need for two parents in ideal circumstances.
    Also it does not make sense to offer a marriage tax allowance to couples without children and just one earner, at least not when, realistically speaking, the country simply can’t afford it.
    A marriage tax sends out ‘a message’ , yes, but it doesn’t solve the problem it sets out to solve – ie that we need more stable family life and more understanding of the importance of ‘care’ and raising children. How can it? They rarely even mention that this policy proposal is linked to raising children – they only talk of the ‘institution’ of ‘marriage’, which, let’s remember, these days does not even automatically mean there will be any children whatsoever (an increasing number choose to remain child-free) !!
    This article is quite interesting too….
    Sorry to ramble – out to swimming lessons now…..

    http://www.guardian.co.uk/commentisfree/2010/may/01/marriage-tax-tories-families

  4. Nicky Heppenstall Says:

    What irks me is that I have been a FTM for much longer than we planned because I had a stillborn and three miscarriages in-between my two healthy children. I would have been free to return to work, albeit within school hours, in 2005, but my youngest actually started school in 2008. So for 10 years my tax allowance has been dormant instead of being used by my husband – I am now self-employed but part-time to still fit around school hours, as all doors left open at my last employer have long-since closed.

    I resent all the ‘incentives’ on mums to get back to work, and they wonder why the ‘youth of today’ so often leaves something to be desired…??

  5. Julie Says:

    I am a member of full-time mothers and I will not be voting Conservative on Thursday 6th May.

    I stay at home and care for my children, I receive no benefits except child benefit. I am not rich, far from it, I have given up my career, my wage and my status as a valued member of society. In respect to the policies of all 3 main political parties in this election I am ‘invisible’. Yet I am seen as lucky and privileged by other working mothers I know for being able to stay at home and care for my children.

    My husband earns a good salary, not a huge amount of money and certainly no bonuses, but it is a lot more than the majority of people in this country earn. My husband’s wage is just over the limit for the higher tax band and the present tax system has meant we have had to make sacrifices, and at times we struggle in order to make ends meet. I accept that this is how it has to be, afterall it was my decision to give up work. However, if myself and my husband went out to work and our combined salaries totalled that of my husband’s current salary we would pay tax at the lower rate and still have the same amount of money coming into the home.

    The suggestion by the Conservatives to give tax breaks to ‘married’ couples is absurd and quite frankly outdated. Whether married or not all couples with dependents should be given tax allowances based on their ‘joint’ income. David Cameron’s present Conservative party is seemingly no different to the Tory party of old and if he should suceed in this election I fear we will soon see his ‘true colours’.

    Single, divorced or widowed parents should be given sufficient help in order that they can provide a stable home for their dependents. Child Benefit is given to all children, irrespective of their background, so it is unfair to suggest that single or widowed parents shouldn’t get any tax breaks as they get child benefit and ‘other benefits’ – not all do, and some of those that do are still really struggling.

    Too often these groups are forced out to work, earning low incomes and working long hours. Relying on substandard childcare and breakfast and after school clubs, at a time when their children need them at home more than ever. Labour’s proposed policy of making all under 25s get a job must surely leave some children being cared for by poorly paid nursery staff instead of being cared for by their own parent. Just because a person is a single, divorced or widowed parent we shouldn’t take away their chance to stay at home and care for their children, if that is what they choose to do.

    Caring for our own children should not be a luxury and affordable only to those who come from more affluent andtraditional backgrounds. All parents should be able to make the choice to care for their children at least until schoolage without losing out financially.

    Labour are not all bad, yes they have made some mistakes and Gordon Brown has proved to be largely an unpopular Prime Minister, but, Labour have done great things for child poverty over the years too. Before having children I worked with Jay Belsky etal researching Sure Start programmes and later worked on New Deals for Communities and I saw how families from many different backgrounds lived. It is not enough to give tax breaks to those deemed ‘respectable’ simply because they are married. All parents, from all backgrounds should be given equal consideration and tax breaks should be provided on a means tested basis. For me, being a married couple with dependents and having only one partner working is not a good enough basis. We must strive for fair taxes for all, no matter what a person’s circumstances.

  6. Marie Says:

    Julie – I agree with your posting.
    I’d just like to add if I may…

    Fair taxes for all family units, based on means-testing each taxpaying household and based on number of dependents, has to be the best way forward regardless of how many adults are working. In other words ‘household’ taxation, rather than ‘independent’ taxation.

    I think the Tory marriage tax proposal has not been presented at all well and also failed to prioritise the wellbeing of ALL the nation’s children regardless of circumstances. What worries me most is that the ministers don’t really seem to understand the proposals themselves – certainly it came across that way when they were asked , and often failing, to defend their marriage-tax position!

    I do think that Labour’s tax credits have helped lots of low paid /workless households, whether single or married, but Labour has consistently failed to address the gap between the rich and the poor and growing social immobility. They have not created jobs for young people and they’ve encouraged single parenthood. THe rich have got richer under Labour and the poor have got poorer. There’s a direct link between single parenthood (I mean never in a couple ) and poverty, and we need to talk about that honestly.

    ‘The Spirit Level’ is a book I’ve been meaning to read for some time and talks about more ‘equal’ societies. Not sure if it gives many solutions..if anyone has a chance to read it please do post a posting on this site….

    Re child poverty I think we should know that Labour’s preferred ‘solution’ to child poverty is to help more and more mothers back into work (often low paid/poor prospects work) , not to help them stay at home to care for their children for a number of years (whether it’s the mum or the dad actually, it’s not really a gender thing). They want universal childcare, taxpayer funded – this is their ‘vision’ to give children ‘the best start’ from a very tender age ie stranger care/so called ‘professional’care. They are simply not looking at ways of helping mothers (or the father) to be at home caring. Hands-on caring is hugely undervalued.

    The ‘equality’ agenda is measured by the sum on the pay packet at the end of the month and, to me at least, this seems a really superficial way of measuring the true value of a person’s contribution to society.

    I don’t know what the answer is. There’s certainly a lot of work to do in campaigning for parents to be better supported in their parenting roles (and this doesn’t just mean helping them balance paid work with caring – rather it means helping them to do the caring, full stop! ). Children deserve better than they’ve been getting in recent years. Adults are stressed and can’t cope with the pace of life – no wonder children are confused and stressed. Parenting is a huge job and two pairs of hands are better than one – children need fathers as well as mothers, no matter how they decide to share the job of parenting between them.

  7. Alison Dale Says:

    As a member of FTM I was glad to see Anna Lines’s ‘cautious welcome’ of the Conservatives’ proposals. It is a step on the way to universal transferable tax allowances, which FTM have campaigned for for a long time! In today’s economic climate it could not realistically have been made any more far-reaching. Are other FTMs aware of the studies which have shown how a married couple with children is significantly less likely to split up in the children’s early years than an unmarried couple? (Obviously there are always exceptions but this is the general trend.) The very best situation for the welfare of children is for their parents to stay together, (even more important than whether the mother is in paid work or not), and if this commitment is being encouraged by the Conservatives then I think we should welcome it, as people who are so concerned for the welfare of children. I am obviously not thinking of dysfunctional relationships in this, and I would not expect couples to stay together just for £150, but the tax system can send signals, as it does with ‘green’ issues, which can make people think!

  8. Nikki Galbraith Says:

    I agree with Alison Dale that anything which recognises marriage and the stability it brings to society is a good thing . As a married full time mother I was very upset when this recognition was ignored by the ( hopefully ) outgoing government .
    I am sorry that David Cameron extends this to ” civil partnerships “because when this law came in we were promised that it would never be given the same status as marriage .
    Single mothers have the government to look after them , which under Labour has meant they have replaced the role of the husband in providing for the family . I do agree that mothers of very young children should be provided for so they can stay at home until their children reach at least nursery school age when they could get part time work .
    Divorced mothers and widows are a different matter .
    I agree that we could all be taxed on our varying circumstances ( surely something which would prove too time consuming ) .As we have been a home educating family for over 23 years and very rarely needed to go to the doctor why should we be taxed the same as those whose children are in full time state schools ? Also surely we could have means testing for child benefit ?
    We all know that hard times are coming no matter who gets in and we are going to learn how to do without many of the so called necessities which weren’t invented in our grandparents day !!

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