Welfare shake-up will see £40-a-month boost for single mothers

Money given to them as maintenance by their former partners will no longer be deducted from their benefits.

Currently, anything over £10 a week in child support payments is docked from their handouts.

Boost: Single mums could see an extra £10 a week in the benefit shake-up

The Department for Work and Pensions calculates that allowing them to keep the extra cash will leave the average single mother £10 a week better off and will also raise 100,000 children above the breadline.

Yesterday's Green Paper said the Government was proposing 'to disregard child maintenance fully in all out-of-work benefits from April 2010.

This would allow parents with care on benefit to keep every penny of their maintenance, where maintenance is paid'.

A DWP spokesman said: 'We believed it was unfair to deduct child support payments from benefits.'

In his statement, Mr Purnell also announced that parents with children aged seven or over will be expected to seek work.

At present they can remain on benefits until their children reach 16. Those who refuse to try to find a job will lose some of their benefits.

This will be carried out by switching parents from income support to Jobseeker's Allowance, which is paid at the same rate but comes with a requirement to look for work.

The age limit of the youngest child will fall from 16 to seven in October 2010, and will affect 40 per cent of the 776,000 single parents in the UK.

Britain's employment rate for lone parents is just 56.5 per cent, the lowest in Europe. In Denmark, the figure is 80 per cent.

Single parents here typically get income support of £57.45 a week, child tax credit worth £65 a week, and help with council tax and housing costs of £88.45 a week.

The extra cash for lone parents is in stark contrast to the way married couples are punished by Labour's tax and benefit system if one partner stays at home to look after children.

Couples are better off if they break up than if they stay together.

A couple on £18,000 a year and living in the same house pay a 'penalty' in reduced benefits of £8,588 a year - equivalent to more than 40 per cent of their pre-tax income.

They suffer because they live together and are therefore assessed for benefits on their combined income.

The Conservatives say they would end the anomaly in the benefit system which gives a single parent the same amount as couples.

The reforms could mean an extra £3,000 a year for some couples.