Localising Council Tax - Government Shifts the Burden

Woking Council tonight approved its scheme to "localise" Council Tax.  Essentially this means the Council agreed which groups in the population who either have not previously paid Council Tax or have not paid full Council Tax will have to make at least a contribution to their Council Tax in future.

The Past
Until this year various groups in the population such as the unemployed, carers, those on low incomes and pensioners were entitled to council tax benefits.  These benefits were funded by the government who gave the money to local councils to run local services.

The Future
The Coalition government, in its wisdom, decreed that everyone of working age should pay something towards their Council Tax.  Pensioners were excluded from this latest wheeze and their Council Tax benefits remain unchanged.

Each Council has had to come up with a "Local Council Tax Support Scheme". The government offered a sample scheme and in Surrey the county worked with the boroughs to come up with a framework scheme.

Woking rejected the government scheme, even though if offered money to ease the scheme in for the first year, because of the wide ranging impact it would have had on those who would struggle to pay.

Woking has gone for its own variation of the Surrey framework.  The scheme has the following changes which will come into force from April 2013.

The second adult rebate scheme is removed
Currently if another adult lives with somebody who receives Pension Credit, Income Support, Income-based Job Seekers allowance or Income-related employment and support allowance or has a low income they can claim Council Tax benefit.  This is removed.  This affects 25 people living in Woking.

Benefit is limited to level of Band D Council Tax
Council Tax benefit will only be paid for the amount due on a Band D property.  So if a resident lives in a Band E property they would need to pay the difference between the two bands.  This affects 160 Woking residents.  The difference between Band D and Band E Council Tax was £346.20 in 2012/13.  I made the point at the Council meeting that this may impact those who happen to live in a more expensive area who would need to find several hundred pounds more per year when food, gas and electric prices are already rising.

Minimum weekly benefit payment of £5
if the Council Tax benefit due is less than £5 a week it will not be paid.  Doesn't sound too bad but as I said at tonight's meeting this could be £200 a year for someone on a low income who is already struggling.  This affects 275 Woking residents.

Saving limit of £10,000
The amount of savings residents can have and still qualify for Council Tax benefit is reduced to £10,000.  This affects 43 Woking residents.

There is a hardship fund to help those who cannot pay what is due under the new scheme.  I made the point at the Council meeting this evening that this smacks of deserving and undeserving poor with those unable to pay having to plead with the Council for help with their bill.

I'm not happy with this scheme but it is sadly something that had to be done.  I am satisfied it is the best of a bad job.  Council officers in Woking really did work hard to find a scheme that had least impact.  The logic of charging more to those who have least is totally beyond me.

Woking Council has partially been able to reduce the impact for those on benefits or low incomes by making "technical changes" to Council Tax.  I will cover those changes in another blog post.