Council Tax Reduction Scheme

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Each year the Council has to decide whether to change the Council Tax Reduction scheme for working age applicants in its area.


This year the Council has decided that changes should be made to significantly change the Council Tax Reduction scheme due to the introduction of Full Service Universal Credit.


In effect the traditional link between Housing Benefit (which will no longer be available to new working age claimants) and Council Tax Reduction will no longer exists and it is essential that the scheme is changed to meet future requirements, to reduce administration costs and to ultimately prevent any additional costs being added to the Council Tax.  CLICK READ MORE ABOUT COUNCIL TAX REDUCTION

The Borough Council is proposing a number of changes to its existing scheme which are listed below as option 1-11.  This is your opportunity to tell us what you think of these options and to provide you with the opportunity to tell us your views.

Option 1 – Introducing an income grid scheme to replace the current scheme for all applicants of working age


The current scheme for Council Tax Reduction is largely based on the previous Council Tax Benefit scheme which was assessed alongside Housing Benefit. Housing Benefit for working age applicants is being phased out and for new claims will not be available after 2018. Whilst Housing Benefit was the main provider of housing support for working age people, it was logical to maintain a Council Tax Reduction scheme that mirrored the approach. Now that Universal Credit is being rolled out, it gives the Council the opportunity to significantly simplify the Council Tax Discount.   CLICK HERE TO READ MORE

Option 2 - To limit the number of dependant children within the calculation for Council Tax Reduction to a maximum of two for all applicants


Within the current scheme, applicants who have children are awarded a dependant’s addition within the calculation of their needs (Applicable Amounts). The new scheme will be based on an income grid system which takes into account the number of dependants within the household; however, it will be limited to two, for all applicants. This will bring the scheme in line with Housing Benefit, Universal Credit Tax Credits and Council Tax Reduction for pension age applicants.  CLICK HERE TO READ MORE

Option 3 – To remove Non-Dependant Deductions from the scheme


Currently where an applicant (and their partner if they have one) has other adults living with them such as adult sons, daughters etc., their Council Tax Reduction may be reduced. Any charge made is called a Non-Dependant Deduction. In theory, the applicant should look to recoup this deduction from those adults.  CLICK HERE TO READ MORE

Option 4 – Changing the claiming process for all applicants who receive Universal Credit


Currently, where an applicant wants to claim Council Tax Reduction, they must make a formal application either on-line or in paper format. Where applicants claim Universal Credit from the Department for Work and Pensions (DWP) there is often either a delay in receiving a Council Tax Reduction claim or no claim is made at all leading to a potential loss in entitlement. The latter occurs largely through confusion, with all other benefits being claimed from DWP and claimants not realising they must make an additional claim to the Local Authority.  CLICK HERE TO READ MORE

Option 5 – Removing the current earnings disregards and replacing them with three disregards £5 for single applicants, £10 for couple applicants and £20 for applicants who are lone parents.


Where applicants (or their partner if they have one) have earnings and work over 16 hours per week, an earnings disregard is applied depending on their individual circumstances. The standard disregards (only one is awarded) are £5 per week for a single person, £10 per week for a couple, £20 per week if they meet certain conditions such as disablement or part time special employments or £25 for lone parents. If they work additional hours, in some circumstances they may receive an additional £17.10 disregard per week. Also, if child care is paid for above that received free from Central Government, then further disregards can be made again earnings for monies paid out.  CLICK HERE TO READ MORE

Option 6 – Disregarding Carer’s Allowance which is currently taken into account as income


Where applicants (or their partner if they have one) receive Carer’s Allowance for looking after a person who is ill or disabled, the Carer’s Allowance payment they receive is considered as income for Council Tax Reduction. This is partially offset by an award of Carer’s Premium within the current scheme. With the move to an income based ‘grid’ scheme, the use of premiums etc. will end. The Council feels that it is fair, in these cases, to fully disregard any payment of Carer’s Allowance received. CLICK HERE TO READ MORE

Option 7 – Disregarding the support element of Employment and Support Allowance.


Where applicants (or their partner if they have one) receive the support component of Employment and Support Allowance the current scheme awards a premium that ‘offsets’ the amount they receive from the DWP as a support component. In effect this means that the support component will not affect any entitlement under the Council Tax Reduction scheme. Disregarding this component under the new scheme will achieve the same result and not disadvantage any applicant.  CLICK HERE TO READ MORE

Option 8 - Where the applicant is in receipt of Universal Credit, any amount awarded as a housing element will be disregarded when calculating the applicant’s income.


When an applicant for Council Tax Reduction is in receipt of Universal Credit it will be essential to disregard any housing element awarded from their income when calculating any income under the new scheme. CLICK HERE TO READ MORE

Option 9 - Using a set income for self-employed earners after 1 year’s self-employment


In order to align Council Tax Reduction with Universal Credit, the Council proposes to use a minimum level of income for those who are self-employed. This would be in line with the National Living Wage (or National Minimum Wage if you are under 25) for 35 hours worked per week. Any income above this amount would be taken into account based on the actual amount earned. The income would not apply for a designated start-up period of one year from the start of the business.  CLICK HERE TO READ MORE

Option 10 - To set a minimum level of Council Tax Reduction at £1 per week


Currently, the scheme will allow support from 1p per week per applicant. This is administratively inefficient and costly given the need to notify all applicants by letter. The Council is proposing to increase the minimum level of Council Tax Reduction to £1 per week. Where an applicant would receive less than £1.00 no amount of Council Tax Reduction will be granted. CLICK HERE TO READ MORE

Option 11 - Reduce the capital limit from the existing £16,000 to £6,000


At present, residents with savings, capital and investments of more than £16,000 are not entitled to any Council Tax Reduction.  Under the proposed change; this limit would be reduced to £6,000.


Survey is open from:

25 October -  20 December 2018

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