From tomorrow, 1st April 2013, the Council Tax Benefit (CTB) system will be replaced by a local Council Tax Support (CTS) Scheme in Stockport and in other parts of the UK.
The government is also reducing the grant for Council Tax Support by at least 10%, which means a shortfall of at least £2.4 million.
Advice in the Borough of Stockport can be found here.
The Joseph Rowntree Foundation have issued a report on the impact of localising council tax benefit suggesting that changes to council tax benefits will affect poorer households and create inconsistencies in neighbouring areas. Multiple schemes will add complexity and reduce transparency.
The replacement of Council Tax Benefit (CTB) with Council Tax Support (CTS) marks a historic move from a nationally devised system to one of 326 different local schemes in England. This restructuring, along with a 10 per cent cut in funding, will create considerable challenges for local authorities, advice services and benefit recipients alike.
BACKGROUND
Council tax benefit (CTB) reduces the amount of council tax that low-income households have to pay – often to nothing. As such, CTB is not a benefit, but rather a council tax rebate. In April 2013 the national system of CTB will be abolished and replaced with local systems of Council Tax Support (CTS).
The funding for CTS in 2013/14 will be 10 per cent less than CTB.
In England, each of the 326 lower tier and unitary local authorities decides how the system will work in their area. The only requirement of central government is that the current levels of support for pensioners are retained.
Under CTB, any unexpected increase in cost was met through the Treasury’s budget, but under CTS the Treasury’s spending is fixed, so the local authority is liable for any changes in cost. (Funding for CTS in Scotland and Wales will also be cut by 10 per cent but there will be no change for claimants. The Scottish and Welsh governments are making up the cut from other sources.)
To complete this study, information was collected from each of the 326 English local authorities on their CTS schemes for the year beginning April 2013. It was then analysed to estimate the impact of each scheme on local claimants.
The study found that:
In the year beginning April 2013:
- 18 per cent of councils will retain the 2012/13 levels of CTB and 71 per cent will require all working-age adults to pay at least some council tax, regardless of income.
- 11 per cent will make some changes but these will not affect all CTB recipients.
- Some 2.4 million low-income families will pay on average £138 more in council tax in the year 2013/14.
- 78 per cent of those affected by the changes currently pay no council tax. Councils will have to start collecting, on average, £140 per year from these households. It is unclear how economical this will be for councils.
- 2 million working-age CTB claimants are in poverty, and a further half million just above it. An increase in council tax would leave them with even less disposable income.
- The replacement of CTB with CTS marks a historic move to 326 different local schemes in England.
- It will be a curious system when a jobseeker with a state-provided income of £71.70 per week pays some council tax in some parts of the country, but is considered too poor to pay in others.