The social concern charity CARE has called on the government to radically restructure the tax credit system, saying it threatens to destabilise family life, reports The Good News.
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Tax consultant for CARE, Don Draper, said at a conference held by the Institute for Fiscal Studies in London, that the system is also failing to bring poor families out of poverty and must undergo urgent redesigning.

Mr Draper commented before the conference: “Gordon Brown said in his 1998 Budget that ‘support should be based on family need not family structure’. The tax credit system has failed this test.

“The support given to many two-parent families should be on a par with support available to one-parent families. As it stands, some poor two-parent families are not getting the child-related credits at all.

According to Mr Draper, the tax credits system introduced in 1998 was recently described as a ‘nightmare’ by the Public Accounts Committee (PAC).

|QUOTE|He also highlighted research statistics that show that the number of children living in poor families remains at a massive 3.5 million, despite a 500,000 drop. Of the 3.5 million, around 2.1 million of these children are living in households with one or both parents in work and qualified for the full range of tax credits, said Mr Draper.

He said: “The tax credit system meant that many low income couples would find they had more money to spend if they lived apart rather than together – even when the additional housing costs are taken into account.”

Mr Draper also said, although finance may not be the main reason, it was likely that tax credit issues affect the decisions families or couples with children make as to whether to live together or separately.

He concluded: “Given the cost to the Exchequer of family breakdowns and the fact that stable families are best for children this is certainly an issue that requires a lot more attention than it has so far received.”