There’s a big change coming in how District Councils treat people on low incomes. At the moment there is a system called Council Tax Benefit. If you qualify for Council Tax Benefit, you don’t pay any council tax. It’s a national system, each council just follows the national rules.
However from April 1st (not a good date to choose!) Council Tax Benefit is replaced by Council Tax Support Schemes. The government is basically saying to each council:
“Here’s the amount of money that was needed to pay for Council Tax Benefit in your area. Well, we are going to cut the amount we pay you by 10%. And how you deal with that shortfall will be your decision. If you have enough funds available, you can carry on with your own local Council Tax Support Scheme as before. But probably you will have to start charging people part of their council tax. But we’ll only let you affect people under retirement age – whatever happens , people of state pensionable age won’t lose out on this.”
At last Full Council, we asked for details to go on the council website – you can find them here and here. If this is an important issue for you, have a read…
Anyway, here is the summary from the council website:
From 1 April 2013 Council Tax Benefit (CTB) will be abolished and replaced by the LCTS scheme – 2,300 working-age residents in the Rochford District will be affected by the changes and the Council is urging them to start financial planning now.
Under the current CTB arrangements, the Council receives funding from the Government to cover its costs. This will not be the case for the LCTS scheme.
Under the LCTS arrangements the Government will give the Council a fixed grant. This will be 10 per cent less than we currently pay out in CTB, meaning the Council has £520,000 less to run the LCTS scheme.
The Council has had to make some very difficult decisions. Because pensioners are protected, the level of support given to working?age customers under the LCTS scheme will have to be less than it is under the current CTB scheme.
The Council will be contacting everyone affected by the changes in early January and offering them advice and further help, including access to advice on financial planning to ensure that those affected are ready for the changes.
The main points of the new LCTS scheme are:
People living in properties whose Council Tax band is E, F, G or H will have their LCTS restricted to the maximum amount payable for a Band D property.• Regardless of their financial circumstances, every working-age claimant will pay the first 20% of their council tax liability. This means people who currently get full CTB will have to pay something towards their council tax from 1 April 2013. The savings limit for claiming LCTS will be £6,000 (the limit for CTB at present is £16,000) Child maintenance is currently disregarded in full when we calculate CTB. Some people receive up to £1,000 per month which doesn’t get included in the CTB assessment. This disregard will stop and we will take child maintenance into account as income when we calculate entitlement to LCTS. Currently we reduce CTB for working-age people if an adult friend or relative lives with them. These types of people are known as non-dependants. We want to try and ease some of the financial pressure as well as try to reduce homelessness and under-occupation of houses. Therefore we will stop making non-dependant deductions when we calculate entitlement to LCTS. Second Adult Rebate can be granted to single people who have a high income if they share their home with someone who is on a low income (not their partner). This scheme will be stopped for working-age claims.
It was agreed at Full Council that there would be a ‘hardship fund’ set up to help residents who really couldn’t afford to pay.