By Jack O’Sullivan, Fathers Direct

Is the government over-optimistic about its achievements in cutting child poverty? That is the worrying question raised by a court of appeal ruling involving a separated father who shares care of his two children, but has been denied benefits to help him with that job. So appalled were the judges that, in a 40-page judgment published a fortnight ago, one labelled the practice "grotesque and degrading … bringing the law into disrepute".

This case, fought for seven years by Eugen Hockenjos, from north London, exposes a glaring anomaly in the benefits system. After separation, benefits relating to dependent children can be paid to only one parent. So they go almost invariably to the resident parent, even when the other one cares for the children half the time. The result for some, inevitably, is poverty.

These families are not invisible: they are the ones still in the park when it is raining on Saturday afternoons. Dad may be living in a bedsit, unsuitable for overnight stays, where he may have few resources such as toys and clothes – even food. In short, we are talking about children, probably recorded as being out of poverty – thanks to much-needed financial support for resident parents – who in fact spend lengthy periods impoverished, typically with dad.

I know, for example, of an Edinburgh father who every Monday would buy five tins of baked beans at 9p each – one for each weekday – to save money for when he had the kids at weekends. He worried constantly about paying for heating, electricity, bedding and clothing during lengthy school holidays. Yet the benefit system treated him as a single man, without dependents.

As the Joseph Rowntree Foundation reported this month, recent welfare changes have neglected single men. Most people think this is OK because we make sure families with children are financially supported. What they fail to realise is how many children live part-time with these so-called "single men".

The list of benefits from which these fathers – and their children – are excluded is lengthy: child benefit, working tax credit (WTC), the childcare and lone parent elements of WTC, and child tax credit. Access to housing benefit and council tax benefit is also affected.

The Equal Opportunities Commission wants to see all barriers to active fatherhood removed – including those in the benefits system illustrated by the Hockenjos case – and has effectively won the argument with the government for a new duty on public bodies to promote sex equality. This duty will be an important tool for updating the child poverty strategy.

The government acknowledges sexual discrimination, but defends the system as administratively efficient – you pick one parent and they get the benefits. The court of appeal was unimpressed. "To allow a father nothing for the maintenance of the child when he shares care virtually equally is so unfair that no reasonable secretary of state should countenance it," declared Lord Justice Ward. He said that the practice of making just one parent responsible for a child under the benefits system was "grotesque … It is degrading to fathers who actually – and lovingly – tend to their children. A law so framed is so far removed from reality that it brings the law into disrepute and justifiably fuels the passions of protesting fathers."

This strongly-worded ruling should concern the government, which has made reducing child poverty a core aim and has designed a complicated welfare system to achieve it.

Failures of the current system are set out in a study by Steve Millett, of York’s One Parent Families Support and Information Network. This pioneering organisation will shortly relaunch itself as Jigsaw UK, a charity devoted to supporting the relationship of children with both parents post-separation. It is the first, belated sign of established voluntary sector organisations modernising themselves in this area of work.

Sadly, the benefits system is behind even the family court system, which at least acknowledges joint residence and is being overhauled by the recent white paper on parental separation.

The court of appeal ruling, relating only to the child supplement of the jobseeker’s allowance, awarded it in full to both parents, rather than splitting it. This generous attitude is admirable, avoiding fresh disputes between already acrimonious couples. If this ruling stands and extends to other benefits, it would encourage separating parents to share the care of their children. But it would also cost a fortune and lead to accusations that couples would be better off divorced than married.

On the other hand, a government move to split benefits would produce warfare. Suddenly, a resident parent would have a financial incentive to cut the time that children spent with an ex-partner.

Given the government’s commitment to cutting child poverty, a generous, humane approach is needed. The chancellor, Gordon Brown, should announce a wholesale review of the benefits system for separated families. He can no longer ignore a gaping hole in an otherwise progressive policy of protecting children from poverty.