4. Incorporating the diversity of families into policy
This chapter analyses how policies across OECD countries have responded to the changing nature of families and family life in the last decades. Today, young people increasingly chose to postpone marriage and parenthood until they are established in the labour market. Family living arrangements are also increasingly diverse due to more frequent divorces and separations, with many more children now living in single-parent families, with unmarried cohabiting parents, or in “re-constituted” families. This growing family complexity and diversity increases uncertainty about family relationships, weakens the private safety net provided by families for their members, and generates differences in rights to benefits and social protection depending on marriage status or family composition. This situation can cause substantial variation in children’s living standards, which can be further exacerbated within certain socio-economic and demographic groups.
This chapter builds on the work by Miho and Thévenon (2020[1]), “Treating all children equally? Why policies should adapt to evolving family living arrangements”, https://dx.doi.org/10.1787/83307d97-en.
The structure and composition of families has not only been changing rapidly in Spain, but also in many OECD countries. In the 1970s, the traditional married-couple male-breadwinner model was still predominant in most OECD countries. Couples typically married in their twenties and separation and divorce were relatively uncommon. Men took the role of breadwinners in a couple whereas women tended to leave work on marriage or parenthood, and often did not return to the labour market until after their children had left education, if at all.
Today, families look very different. Young people increasingly chose to postpone marriage and parenthood until they are established in the labour market. By the end of the 2010s, adults in OECD countries on average postpone their (first) marriage until they are into their thirties, if at all. Family living arrangements are also increasingly diverse due to more frequent divorces and separations, with many more children now living in single-parent families, with unmarried cohabiting parents, or in “re-constituted” families. Dual earning has become the norm in the labour market for most couples in most OECD countries.
Growing family complexity and diversity has generated increased uncertainty about family relationships and weakened the private safety net provided by families for their members (Seltzer, 2019[2]). In addition, differences in rights to benefits and social protection by marriage status or family composition can cause substantial variation in children’s living standards. To further complicate the policy challenge, changes in family behaviours and their consequences are not uniform across socio-economic and demographic groups.
Reforms across OECD countries in response to the changing nature of families and family life have typically focussed on the risks associated with divorce. For example, many countries have introduced and improved support for single-parent families and strengthened parental obligations in case of separation and divorce. Some countries have also adapted access to social and/or fiscal benefits for families with unmarried parents.
However, these reforms remain limited in light of the rise of informal cohabitation and the diversity and complexity of certain family living arrangements (Miho and Thévenon, 2020[1]). For instance, children with informally cohabiting parents do not have the same access to benefits as children with married parents in many OECD countries. Similarly, financial support for children affected by informal partnership break-up or death of a parent is often not the same as when parents were previously married.
As emphasised in the OECD’s extensive body of work on family policy, family policy can only succeed if it provides co-ordinated, joined-up assistance to all families in all their forms. Modern family policy requires offering families a continuum of support from birth through until adulthood, helping parents meet their work and family goals and protecting all families from poverty and disadvantage, whatever their circumstances.
Spain’s family policy is still very much geared towards large families, as detailed in Part I of this report. This framework leaves out many families, which have become increasingly smaller and more diverse. Different tax and benefit laws aim to address the needs of specific types of families, such as single-parent families, families with disabled members, and families where the mother was a victim of gender-based violence, but these definitions do not necessarily coincide across different policy areas. In addition, certain benefits and tax treatments can vary from one Autonomous Community to the other, giving rise to potentially unequal outcomes for families in similar situations and to potential losses of benefits as families move from one region to another.
A basic state family framework would help to guarantee uniform minimum protection throughout the Spanish territory. A similar approach has been used in Switzerland, where a federal law on family allowances has been introduced in 2009 to ensure minimum protection for all families (Box 4.1). A national framework in Spain would provide the basis for incorporating family diversity into policy and allow for the harmonisation of family definitions across sectors and regions.
In an attempt to regulate family allowances across Switzerland, the federal law on family allowances was put into practice in January 2009. The law provides a clear framework that the cantons must follow when setting their own guidelines for family benefits. The federal law regulates who is entitled to receive these benefits and under which conditions. The Confederation prescribes minimum amounts for the child allowance and the education allowance, but the cantons are allowed to be more generous than these federal regulations if they choose to do so. The cantons may also pay a birth and adoption allowance in addition. However, if they decide to introduce such an allowance, it must meet the minimum requirements imposed by federal law. The cantons are fully responsible for their own family allowance fund, and they need to budget and organise the funds themselves.
Legal differences between marriage, registered partnerships and cohabitation are the first determinant of unequal access to family support and protection in many OECD countries. While registered partnerships share many of the legal rights of married spouses in some European countries (e.g. France and the Netherlands), almost no country has completely equalised cohabitation and marriage in terms of the law (Sánchez Gassen and Perelli-Harris, 2015[3]). Countries typically require cohabiting couples to either marry or to register their unions if they want to benefit from the legal protections and rights that resemble those provided for married couples (Miho and Thévenon, 2020[1]). Such civil or registered partnerships exist in two-thirds of OECD countries (21 out of 36 countries) (Table 4.1). In some countries (including the Czech Republic, Finland, Hungary, Italy, Slovenia and the United Kingdom) only same-sex couples can formally register their union, whereas Denmark, Germany and Sweden closed the option to enter into registered partnerships when same-sex marriage was made legal. In these countries, existing partnerships remain valid, but it is no longer possible to enter into new ones. In several other countries (notably Canada, Mexico, Spain, Switzerland and the United States), access to civil partnership registration varies across regions, as they have the final responsibility for creating such status.
In Denmark, informal cohabiting couples are recognised and are legally defined in specific areas, such as The Danish Inheritance Act, The Danish Administration of Estates Act and The Danish Insurance Contracts Act. Cohabitants have fewer rights upon inheritance such that they have the right to inherit only in case of a specific will. Nevertheless, informal unions have some rights in respect of social security, compensation, taxes and housing similar to the married couples. Cohabitating couples who are not married are defined in specific areas but are almost equalised to the married unions. For example, social assistance is calculated at the individual level, or a survivor’s allowance can be paid to any person whose husband/wife or cohabiting partner has died, on the condition that they shared a joint address for the last three years immediately preceding the death.
In France, civil partnership (PACS) has effects on the social and salary rights, the property, the housing of the partners and in tax matters, but a PACS has no effect on the name or filiation. These partnerships are available to same-sex as well as opposite-sex couples. Civil partners are jointly and severally liable for debts contracted by one of the partners for “everyday needs”. Each partner remains free to administer his or her property and remains liable for his or her personal debts. PACS partners are subject to the same tax rules as married couples. In order to enter into a pact, the partners must meet certain conditions and draw up an agreement, then register it, providing certain papers. All the couple’s resources are taken into account in determining the amount of: family allowances, housing allowances, the disabled adults’ allowance and social assistance. Loss of rights for the person who enters into a PACS loses in particular: the family support allowance, the widowhood allowance, and, under certain conditions, social allowances if they were entitled to it as a single parent. The PACS has effects on income tax returns (they are subject to the same rules as married persons), inheritance tax, the deduction and reduction of gift tax, and taxation of real estate wealth tax.
In the United Kingdom (England and Wales), same-sex couples can formalise their relationship by entering into a civil partnership. The legal consequences are virtually identical to those of marriage (including ancillary relief). Civil partner’s finances are considered jointly when deciding if they are entitled to means-tested benefits and tax credits such as contributory employment and support allowance, maternity allowance, contribution-based Jobseeker’s Allowance. Civil partners can claim bereavement benefits or a retirement pension based on their partner’s national insurance contributions. Other benefits, for example, Disability Living Allowance and Attendance Allowance are not affected by whether or not you are a civil partner.
In Spain, there is no national framework that regulates the legal effects of cohabitation, and even though most Autonomous Communities have passed specific statutes establishing the legal effects of cohabitation, differences between marriage and cohabitation remain larger than in several other European countries. For instance, in Sweden and Norway, some rights that apply in case of death and were reserved for spouses have been extended to cohabitants with children and those living together for longer periods of time (Sánchez Gassen and Perelli-Harris, 2015[3]). The allocation of the joint home in case of separation is also regulated in laws on cohabitation or household communities in these two countries. In most European countries, social security laws focus on household communities and effectively treat marriage and cohabitation the same.
A more limited legal regulation of cohabitation is not necessarily to the cohabitants’ disadvantage, and it may be an explicit choice to keep a certain independence. However, the lack of legal regulation may render cohabitants vulnerable, for instance, as a result of the death of the partner or separation. Careful consideration of differences in treatment by marital status is necessary to ensure that vulnerable people and their children receive appropriate state support when needed.
Social benefit programmes that limit eligibility to families with incomes below a certain level (i.e. means-tested) must include an explicit definition of who is included in the family, such that the total income can be calculated based on the sum of the incomes of the members of the unit. Such definitions either use as a basis the “family unit” (individuals living together related by blood, marriage or adoption) or the “economic unit” (individuals living together who share resources) (Miho and Thévenon, 2020[1]). For instance, in the United States, the family unit is used to calculate eligibility for child-care vouchers, housing vouchers and Medicaid, whereas the economic unit is used for some other programmes. European countries generally take into account the economic unit when calculating means-tested social benefits.
To ensure equal treatment for families, it is important to use easily enforceable criteria and ensure that the same criteria are shared by the various social and tax administrations, accurately reflecting the household’s budget constraints and sharing of expenses (Miho and Thévenon, 2020[1]). For instance, in Denmark, resource sharing is assumed if cohabiters are 25 years or older, have a shared residence and have either a child or some other indicator that they are a couple, such as a joint bank account or a shared mortgage. In France, the jurisprudence of the Conseil d’Etat indicates that only a bundle of concordant evidence makes it possible to establish a situation of cohabitation. Different pieces of information can be used, such as joint property, water and electricity consumption, the existence of a single home insurance contract or the presence of a child for whom one parent assumes financial responsibility and the other receives family benefits. If individuals wish to be treated as independent units, then evidence that partners pay separate rent and food outlays can be requested.
In France, irrespective of whether a couple is married, has a registered partnership, or cohabits, all resources are taken into account in determining the amount of family allowances, housing allowances, disabled adults’ allowances and social assistance. Similar regulations exist in England (United Kingdom), where finances of couples are considered jointly (regardless of whether they are living together in cohabitation or have civil partnerships) when deciding about their entitlements to benefits and tax credits such as contributory employment and support allowance, maternity allowance, the contribution-based Jobseeker’s Allowance. In Spain, the criteria to assess economic resources of couples do not only differ by marital status, but also across the different social and tax policies, and across regions. The role of a centralised family allowance fund like in France to assess the economic resources of families and determine the taxes and costs of child services for parents could be considered for Spain (see Box 4.2 for more details).
The Family Branch of the French Social Security system consists of a National Family Benefits Fund (Caisse Nationale des Allocations Familiales or CNAF) and a countrywide network of 101 local family benefits funds (Caisses d’Allocations Familiales or CAF), which are responsible for providing family benefits to all families legally residing in France with at least one dependent child, regardless of their nationality and marital status.
Families can be eligible for more than 20 benefits depending on their family situation and their income. These benefits can be grouped into three main categories: basic maintenance benefits, early childhood benefits (Prestation d’Accueil du Jeune Enfant or Paje), and special benefits, such as housing allowances or additional benefits paid to parents of children with disabilities or serious illnesses. The CAF also finances a number of services, such as childcare facilities and school meals.
To determine families’ eligibility for certain benefits and services, the CAF calculates a family quotient. This family quotient depends on the “shares” in the household. Parents account for two shares, irrespective of whether they are married, live in a registered partnerships, or are single. The first two dependent children each account for half a share, and a full share per child is counted from the third child onwards. Total household income (i.e. sum of revenue(s) and social benefits) is then divided by the number of household “shares” to obtain the family quotient. This family quotient is then used to determine entitlement to certain benefits as well as the price families have to pay for childcare, school meals, or extra-curriculum activities organised in schools.
A similar, though slightly different, family quotient is used by the French tax authority to determine the tax obligations of families. Contrary to the CAF, tax authorities do take into account the marital status of parents to determine the family quotient for tax purposes. However, the overall principle remains the same, a couple with children will pay less taxes than a single person with equal revenues.
Finally, the protection and income that children and other family members receive in case of parental death often depend on the marital status of parents (Miho and Thévenon, 2020[1]). As the loss of a parent is likely to result in a substantial decline in family income, rules and regulation related to survivor pensions, housing and household assets can have a significant effect on children’s living standards.
A survivor’s pension is a state transfer paid to a dependent surviving spouse. Even within marriage, this right is often subject to eligibility criteria, such as being married for a minimum period of time, being above or close to the retirement age, or having custody of an underage child. Few countries extend this right to non-married partners. Those countries that allow different-sex registered partnerships, Greece and the Netherlands extend the married right to survivor’s pensions to registered partnership. Hungary, Iceland, the Netherlands, Norway, Portugal, Sweden, Slovenia, and the United Kingdom extend the possibility of survivor’s pension to cohabiters. Within that group, Hungary, Iceland, Norway and the United Kingdom impose extra eligibility requirements to cohabiters, such as a minimum length of time spent together and/or having had a child together, or if the deceased explicitly named the partner in their will (Miho and Thévenon, 2020[1]).
The treatment of a couple’s property in the case of a partner’s death varies greatly across countries depending on their marital status. Some countries automatically consider the property acquired during a marriage as joint property (absent a prenuptial contract), such that the surviving spouse automatically owns 50% of the possessions in the event of death. These rights are extended to cohabiters in some countries, though often only under certain conditions: Sweden limits the automatic right of joint property to a specific type of property; France, Italy and Norway only apply it in the case of a contract; and Finland, Iceland, the Netherlands, and Norway apply the right if the cohabiter can argue that they contributed to the acquisition of the property. Other countries (Belgium, the Czech Republic, Greece, Hungary, Poland, and Portugal) do not extend the automatic right to cohabiters. In contrast, countries can also choose to not have an automatic system for joint property for married spouses: a joint property regime can be established by choice (Italy) or through a contract (Austria); or all property of the deceased can be subject to inheritance laws like in Germany, Iceland, Ireland and the United Kingdom. Inheritance laws often defer to the spouse where there is no will, so this type of system gives only partial rights to cohabiters.
Tenancy continuation, which is the right to remain in the housing rented by a deceased partner, is also an important policy tool to reduce the impact of a parent’s death on children’s living environment. Tenancy continuation allows children to stay in the same school and to keep the same leisure activities and friends network, which may be critical to a child’s material and emotional well-being in an already emotional time. The right to tenancy continuation exists in many OECD countries, even for the cohabitating partner. However, some countries put extra eligibility requirements for cohabiters, such as a minimum residential requirement (France, Ireland, the Netherlands and Norway), the landlord’s consent (the Czech Republic) or the presence of children (Norway). In Belgium and Greece, married people and those in registered partnerships are automatically given the right to tenancy continuation, whereas cohabiters are not given this right. In Finland, there are no systematic rule and the entitlements are subject to interpretation by the relevant public authorities.
Overall, the degree of protection in the event of a parent’s death varies a lot across countries and by marital status. As a result, children’s living standards can be significantly affected when one of their parents passes away. More careful consideration of the interests of children can encourage countries to equate rights across union type in these different areas when a child is present in the household.
References
[1] Miho, A. and O. Thévenon (2020), “Treating all children equally?: Why policies should adapt to evolving family living arrangements”, OECD Social, Employment and Migration Working Papers, No. 240, OECD Publishing, Paris, https://dx.doi.org/10.1787/83307d97-en.
[3] Sánchez Gassen, N. and B. Perelli-Harris (2015), “The increase in cohabitation and the role of union status in family policies: A comparison of 12 European countries”, Journal of European Social Policy, Vol. 25/4, pp. 431-449, https://doi.org/10.1177/0958928715594561.
[2] Seltzer, J. (2019), “Family Change and Changing Family Demography”, Demography, Vol. 56/2, pp. 405-426, https://doi.org/10.1007/s13524-019-00766-6.