Legal Definitions - singles' penalty

The term singles' penalty refers to a situation where an unmarried individual faces a financial or other disadvantage under a legal or administrative system compared to a married couple, even when their total income or circumstances are otherwise similar. This disadvantage often arises from tax codes, social benefit programs, or other regulations that are structured with a bias towards married households, sometimes inadvertently creating a less favorable outcome for single individuals.

Here are some examples to illustrate the concept:

• Taxation Example: Consider two individuals, Sarah and Mark. Sarah is single and earns $70,000 per year. Mark is married, and his spouse earns no income, making their household's total income also $70,000 per year. Due to differences in tax bracket thresholds, standard deductions, or available tax credits, Sarah, as a single filer, might end up paying more in federal income tax than Mark and his spouse combined. In this scenario, Sarah experiences a singles' penalty because her effective tax rate or total tax burden is higher than that of the married couple with the same overall household income.

• Social Security Benefits Example: Imagine David and Lisa, both retired and receiving Social Security benefits. David is single and receives $2,500 per month. Lisa is married, and her spouse also receives Social Security, but if her spouse were to pass away, Lisa might be eligible to receive survivor benefits, potentially continuing to receive a portion of her deceased spouse's benefit in addition to her own, or a higher amount if her spouse's benefit was greater. If David, as a single individual, were to pass away, his benefits would simply cease, providing no ongoing support to anyone. This illustrates a singles' penalty because the married individual's household has a potential safety net and continued income stream that is unavailable to the single individual's household.

• Healthcare Premiums Example: Anna is a single professional paying $550 per month for her individual health insurance plan. Her friend, Ben, is married, and he and his spouse pay a combined $900 per month for a family plan that covers both of them. While Ben's household pays more overall, the per-person cost for the married couple ($450 each) is lower than what Anna pays as a single individual for comparable coverage. Anna faces a singles' penalty because she pays a relatively higher premium for her healthcare coverage compared to what a married individual might effectively pay as part of a family plan, even when comparing similar levels of benefits.