Marriage Allowance: an unfair tax break that needs to go?

Updated on 10 January 2017 | 21 Comments

loveMONEY writer Felicity Hannah gives her view on the Government's Marriage Allowance.

Almost 3 million couples in the UK are missing out on a free tax break and now HMRC has launched a campaign to make more people aware of it.

It’s the Marriage Allowance, open to couples who are married or in a civil partnership, and it’s worth up to £220 a year to qualifying couples.

It allows one person with a low income to transfer part of their tax-free Personal Allowance to their tax-paying partner and HMRC says just 1.3 million of the 4.2 million people who qualify have bothered signing up.

However, I would argue that it is not the business of the state to reward marriage and that doing so discriminates against the many, many families who do not qualify.

We should not be encouraging the take-up of this tax break, we should be abandoning it. Here’s why:

Big day but not big bucks

Of course £220 a year is not exactly a hefty reward for marriage, but that is not the point. £4.23 a week is hardly going to have couples racing for the altar or registry office, particularly with the average wedding costing £25,090, according to

You’d have to be married for 114 years before you turned a profit.

But it’s the principle that matters here. We’re not in the 1930s now; it’s perfectly acceptable to choose not to marry or to end a marriage. So there can be no justification for rewarding this behaviour through the tax system, even with a trifling amount.

What’s more, this isn’t even a tax break for all married and civil-partnered couples, it’s for those where one partner either doesn’t bring in a wage or earns only a small amount – most commonly those more traditional couples where one partner goes out to work and the other takes care of the house and any children.

It’s about rewarding a 1950s ideal of home life, not the many ways that both married and unmarried people live their lives today.

Of course it’s fine for a couple to operate that way, and many couples with children have no choice. But to suggest that a couple are more deserving of help because they are married and one keeps house is to undo 60 years of progress.

After all, what this nominal tax break is showing is who the state values the most. So what about the people whose relationships the state has decided are less deserving?

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Who’s being discriminated against?

First of all, even married couples won’t get this, it’s estimated that less than a third will qualify. That’s simply because it will only go to couples where one doesn’t carry out paid work and one is the breadwinner.

And don’t assume that this poorly targeted tax break is designed to help children.

The campaign group Don’t Judge My Family reports that fewer than one in five families with children will get it – single, widowed and cohabiting parents will not qualify. What's more, many qualifying couples will be older, with adult children.

I agree with Labour MP Jonathan Ashworth who called it ‘perverse’. He said:

“It's a benefit that doesn't go to the vast majority of families, doesn't go to widows and doesn't go to people who have been left by an abusive husband.”

What’s more, this is just another way in which the Government discriminates against couples who have not married, whether because they have chosen not to or simply not got around to it.

Bereavement benefits and the Widowed Parents Allowance are limited to couples who tied the knot, leaving families who chose not to at a severe financial disadvantage should one parent die.

What about the cost?

Marriage Allowance: is it fair? (Image: Shutterstock)

The allowance is a sop; a bone thrown for those moralising traditionalists who want everyone to marry before they live together and have children.

However, while a few pounds a week may not be enough to change people’s behaviour, it all adds up to a more substantial amount. The Institute for Fiscal Studies (IFS) has estimated that it could cost the exchequer around £700 million a year, assuming people actually take it up.

That’s enough to offset the cuts to SureStart, the cuts to the educational maintenance allowance or the bedroom tax.

Of course, in actual fact the cost is much lower because the take-up is lower. But if 1.3 million couples are claiming it then it’s already costing the exchequer £286 million a year. 

As a nation, we don’t have that kind of money to spare simply to discriminate against families that decided not to get hitched.

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Hang on, isn’t marriage good?

It makes sense for the Government to use the tax system to reward behaviour that is good for society, like not charging VAT on fruit and veg, or helping ease the cost of childcare through childcare vouchers.

So you may be assuming that marriage is good for children and therefore should be encouraged.

However, this is actually not true. Research from the IFS does show that children born to married couples do better, both academically and socially than those born to cohabiting parents. But that’s not some magic conferred on them by the exchange of rings!

Cohabiting couples are more likely to have lower educational qualifications and lower incomes than married couples and both of those are factors in lower outcomes.

It’s ludicrous to suggest that the children of cohabiting couples would achieve more if their parents had wed.

The only other way you can argue that marriage is good is if you are religiously minded and believe that relationships outside of marriage are wrong.

That may be your position and you may believe it wholeheartedly, but it is not the business of the state to penalise or reward based on increasingly dated notions of morality.

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Yes it’s important

One final point. The allowance is so small and the take-up is so low that you might be willing to dismiss this as simply not that important.

There are bigger issues to worry about just now, bigger political concerns to dedicate time and energy to.

However, this is a situation where families are being discriminated against simply because they don’t conform to an increasingly old-fashioned ideal. It’s a situation that rewards highly traditional families and by doing so devalues the set-up of other families. And that’s incredibly important.

This is 2017. Families come in all shapes and sizes and not all choose to get married or remain married. It is not the business of the state to use the tax system to reward behaviours simply based on an old-fashioned and discriminatory notion of morality.

What do you think? Is this a non-issue or does it matter? Should the reward be greater? Have your say using the comments below.

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