Tories commit only to reduce "couple penalty" in tax credits

The term "couple penalty" refers to the fact that state support under the previous government was means-tested against the joint income of a couple, rather than an individual's own income. This meant that cohabiting couples were likely to receive less support in tax credits than if they were living apart.

The Conservatives had originally pledged to end the penalty for all couples in its pre-election manifesto. But in the new government document published today, The Coalition: our programme for government, the pledge has been scaled back committing only to "bring forward plans to reduce the couple penalty". 

Research conducted by the Institute for Fiscal Studies (IFS) last month showed that working-age couples with children are most likely to fall victim to couple penalties, receiving an average of £85 a week less in tax credits than parents who live apart. But the research also suggested that Conservative plans to end the penalty for all couples would have cost around £18bn a year.

The government has also pledged plans to reform the tax credit system to reduce overpayment and fraud, something that was promised by both the Conservatives and the Liberal Democrats pre-election.

A reduction in couple penalties may go some way towards reducing fraud, as the IFS research also showed that £650m of tax credits are currently being paid to couples claiming state support as lone parents.

The government has also promised to maintain the goal of ending child poverty by 2020.