New scheme to replace Council Tax Benefit gets final seal of approval

A new scheme to replace Council Tax Benefit in Central Bedfordshire was approved by councillors at the recent Full Council meeting.

The new local Council Tax Support scheme will replace the current national scheme of Council Tax Benefit awards which is being abolished by the government as part of national welfare reforms. The changes will take place from 1 April.

 

At the same time the Government has changed the law for some Council Tax discounts. The Government expects Councils to also introduce local discounts.

 

All Local Authorities are required to introduce a new local Council Tax Support scheme by April 2013. As part of the new arrangements, central Government will pass the funding over to Local Authorities. However, this funding will be reduced. Therefore we need to develop a new scheme which costs less than the previous Council Tax Benefit scheme.

 

While wanting to protect those with little or no earnings capacity, we've had to reduce the overall cost of the Council Tax Support scheme by £1.7 million to reflect the reduced government funding

 

We have developed our Council Tax Support scheme with the following key principles in mind:

• The scheme should be affordable - so that Council Tax payers and services don't suffer
• A fair contribution - those who can pay Council Tax, should pay
• Encourage people to earn a living - incentivise work
• Protecting the most vulnerable

We consulted local residents, existing claimants, landlords and local voluntary and partner organisations last year on our draft scheme. You can view the results of the consultation online:

 

Council Tax Support scheme consultation results

 

Our final scheme has been amended to reflect the feedback from the consultation. Although responses showed that the majority of respondents supported the Council's proposed scheme we made the following significant changes:

• We will establish a Hardship Fund to make discretionary payments in exceptional circumstances for those really struggling to pay.
• Premiums and Personal Allowances used to calculate entitlement to Council Tax Support will be increased at the rate of inflation from 2014/15.

The final scheme was recommended by the Executive to full Council on 8th January 2013. Full Council adopted the final scheme on 24th January 2013.

 

All pensioners who currently qualify for Council Tax Benefit will be protected from the changes and any future pensioners who might claim support will not be worse off as a result of the changes. The Government have issued national regulations which will tell us how we should calculate Council Tax Support for pensioners.

 

 What are the changes for working age people (non pensioners) who currently receive Council Tax Benefit?

 

Below is a summary of the key changes:

• Allowances/premiums are used when calculating means testing for benefits. This is the amount that the Government says that you and your family need to live on each week. Your allowance/premium is then compared with your income to work out your benefit entitlement. We will freeze the allowances/premiums at the current levels for 2013/14. The allowances and premiums will increase with inflation from 2014/15.
• Unless considered vulnerable, (see "who is protected from paying a minimum amount of Council Tax" below) everyone will be required to pay a minimum of 25% of their Council Tax.
• We will increase the earnings disregard by an additional £10 per week for single claimants, couples and single parents. This means that when someone gets a job or increases their hours or earnings, less of their new earnings will be taken into account when calculating claims for Council Tax Support. in other words, there will be an increased advantage in earning an income without jeopardizing Council Tax Support.
• The Second Adult Rebate benefit will be abolished.
• The amount of support offered to people living with non-dependant adults will be reduced.

 

What are the changes for those who currently receive a Council Tax exemption or discount?

Below is a summary of the key changes.

• Owners of second homes (properties not occupied as a main home) will be required to pay the full Council Tax.
• Owners of unoccupied properties will be required to pay the full Council Tax.
• Owners of empty properties undergoing repair or major structural work will be required to pay the full Council Tax.
• Owners of long term empty homes will be required to pay the full Council Tax plus 50 percent extra after the property has been empty for two years. This is in keeping with the council's commitment to tackling long-term empty homes by encouraging owners to bring their property back into use. 

Who is protected from paying a minimum amount of Council Tax?

 

Specific vulnerable groups entitled to Council Tax Support will be protected from paying the minimum contribution of 25 percent. You will be protected from this minimum payment if you are:

(i) Receiving any of the disability premiums (within the Council Tax Support scheme or Income Support, Income-based Jobseeker's Allowance or Income-related Employment and Support Allowance) or

(ii) Receiving Disabled Earnings Disregard (within the Council Tax Support scheme or Income Support, Income-based Jobseeker's Allowance or Income-related Employment and Support Allowance) or

(iii) Receiving Disabled Persons' Reduction for Council Tax purposes or

(iv) Receiving War Disablement Pension or War Widow's Pension or

(v) A lone parent with a child under the age of 5 or

(vi) Single on Carer's Allowance or you are on Carer's Allowance and have a partner also on Carer's Allowance.

 

We will be writing to you in March 2013 to let you know what your Council Tax bill is for 2013/14. We will also let you know about the different ways you can pay your Council Tax.

 

Link to Council Tax page.