A couple with 3 kids split up? How can the state help?

A working age couple in the UK split up with three children under 10 years of age. How might state benefits help them cope?

Non-means tested benefits are those, which any household can claim, if they comply with other rules governing receiving the benefit. Child benefit is non-means tested ‘universal benefit’ (Brown 2007). It is tax-free and paid to everyone who claims it that has children, irrelevant of what other income the household has. 


Recent government legislation has introduced means tested benefits attempting to avoid the ‘unemployment trap’ that low income families can find themselves in when they don’t work. To take advantage of these benefits the mother who has the children in her care would have to look for work. Once she has found a job she may also get help with childcare costs.


This example might work out something like this. Suppose the children’s mother works part-time, between 16 and 29 hours a week. Say she earns a gross yearly income of £5220 or below (in 2006/07). Given these circumstances, she would receive full Working Tax Credit, whether or she has children or not. However, WTC would be reduced by 37 pence for every pound earned over the £5220 maximum. But, substantiating the anti poverty trap claim, she would not loose a full pound of benefits for every pound she earns over the limit. Also as she has children, she would be eligible for help with childcare, as a part of WTC.
References: Brown, V. (2007) ‘Personal finance: setting the context’, in Callaghan, G., Fribbance, I. and Higgenson, M. (eds) Personal Finance, Chichester, John Whiley/The Open University.
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