Cover: Are Household Formation Decisions and Living Together Fraud & Error Affected by the Living Together as a Married Couple Policy?

Are Household Formation Decisions and Living Together Fraud & Error Affected by the Living Together as a Married Couple Policy?

An Evidence Review

Published in: gov.uk website (2023)

Posted on rand.org Jul 11, 2023

by Madeline Nightingale, Giulia Lanfredi, Joanna Hofman, Lucy Gilder, Christian Van Stolk

This report summarises evidence on living together fraud and error (LTFE) and the social and economic context in which LTFE is embedded, with a view to informing DWP's living together policy and its application to reserved GB benefits. LTFE refers to situations where a claimant has a partner but is receiving benefits as a single person (whether intentionally - i.e. fraud - or due to error). LTFE is a widespread issue in the UK, costing the taxpayer an estimated £760m per year. The evidence review on which this report is based employed a literature search (quick scoping review) complemented by in-depth interviews with subject experts.

Although claims for Universal Credit (UC) are made on an individual basis, in couple households both partners' circumstances are taken into consideration in determining the benefit amount. Reflecting the economies of scale associated with living with a partner, the couple rate is lower than the amount paid to single adults. DWP guidance on Living Together as a Married Couple (LTAMC) is used by decision makers to assess whether unmarried adults living in the same household are a couple. UC payments are usually paid to one adult in the household, although under certain circumstances (e.g. domestic abuse) separate payments may be made to each partner.

An important finding from this evidence review is that there is little evidence on LTFE and how this is shaped by living together policy. Despite the lack of direct evidence, the wider literature points to factors that may affect or contribute to LTFE. Research suggests that living together policy may discourage some people from living with a partner (although there is scarce evidence on whether these factors also contribute to LTFE). Claimants may be concerned about the financial implications of being jointly assessed with a partner, for example whether their income will go down (reflecting the couple rate) and whether they will have full access to benefit income and control over how it is spent (particularly if UC is paid to a partner). However, conclusions about the effects of living together policy on claimant experiences and behaviour should be taken as indicative only, due to the lack of direct evidence on this topic.

Living together policy inevitably reflects assumptions and expectations about who will financially support each other, and in what circumstances. Certain principles underpinning living together policy may be out of step with the behaviour and preferences of some couples. For instance, living together policy is based on the idea that couples pool resources and that financial support in couples is coterminous with living together, but evidence suggests that, increasingly, couples choose to keep their income separate. However, there is a lack of direct evidence on how changing social norms and behaviours contribute to LTFE, so conclusions must remain tentative.

Drawing on the available evidence, this report considers whether there is scope to reform living together policy with a view to reducing LTFE. Reflecting the complexity of the issue and the lack of policy evaluations in this space, the policy discussion is descriptive rather than directive (i.e. no recommendations are made). Reducing reliance on household means-testing represents one option for reform, for instance by taking certain components out of UC and establishing them as separate, individual benefits. However, household means-testing is designed to target support to those most at risk of experiencing financial hardship (who are disproportionately adults living without a partner). Another policy option is to only take a partner's income into consideration above a certain threshold of individual income. This would in effect mean that the couple rate for UC would only apply to those earning above this threshold. Widening the circumstances in which split payments can be used or making this the default might also help to address LTFE. Finally, it has been suggested that DWP could introduce a transition period in which couples do not have to undergo joint assessment. This would entail an initial period, for example the first six months that the couple is living together, when the partners can still be assessed individually if they choose to be.

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