The current social welfare system is encouraging fraud by cohabiting parents, a joint Oireachtas committee was told yesterday in reference to the social welfare payment for one-parent families.

Treoir, a support organisation for unmarried single parents, was responding to a report commissioned by the Social and Family Affairs Committee on financial disincentives to cohabitation and marriage.

The committee’s report showed that a cohabiting couple on a single income lost out financially when compared with a lone parent, said Margot Doherty, assistant chief executive of Treoir.

She added that her organisation received many calls from cohabiting parents with incomes above minimum wage who were hugely disadvantaged by the income system.

People cohabiting with children and married parents should be treated the same in the tax system, she suggested.

A parental allowance should be introduced for low-income families instead of a one-parent family payment, Ms Doherty said. It would ensure consistency across means-tested social welfare schemes, she said.

Referring to cohabiting couples who were at the same time claiming the lone parent allowance, Treoir chief executive Margaret Dromey added that any system that encourages fraud by cohabiting parents needed to be addressed.

Labour TD Róisín Shortall said the welfare system “encourages fraud” while Fine Gael TD Olwyn Enright said some parents had “no choice”.