The council is considering changing its scheme from April 2019 and would like your views.

Introduction

 

Council Tax Support is the way that the Council helps residents on a low income to pay their Council Tax. It is the responsibility of every Council in England to devise their own Council Tax Support scheme. We are proposing some changes to how Council Tax Support in St Albans works from April 2019 and we would like your views on the proposal

Background

Since April 2013 Local Authorities have had to devise their own Council Tax Support Scheme to help people on a low income pay their Council Tax. St Albans Council made the decision to make their Council Tax Support Scheme the same as the old Council Tax Benefit Scheme.  This means residents can receive a discount of up to 100% of the Council Tax charge for the property.

 

Part of the Government’s Welfare Reform Programme is the introduction of Universal Credit. Universal Credit is designed to support customers to increase their income by working more hours and earning a higher salary. Universal Credit decreases and increases every month depending on how much the customer earns from their employment. The Government tells the Council every time a person on Universal Credit has a change in income. This means that we have to change a person’s Council Tax Support every time there is a change. This change can be as small as a few pence per week. Every change means that the Council has to work out how much Council Tax Support a customer should receive every month. That customer then has to be sent a new Council Tax Bill. We think this is confusing for claimants.



Proposal

We want to make changes to our Council Tax Reduction Scheme for 2019/20 for people claiming Council Tax Support who also receive Universal Credit. This means that Pensioners and people of working age who do not claim Universal Credit will not be affected by this proposal.

 

We would like to introduce a scheme that looks purely at whether a Universal Credit claimant is working and if so, what their net monthly earnings are. We will receive this information directly from the Department for Work and Pensions.  Our proposal is that we will introduce a series of 'income bands' and we will work out a claimant's entitlement to Council Tax Support based on what band their earned income falls within. A banded scheme should mean that small changes in a claimant's income will not necessarily change their entitlement to Council Tax Support.  We think this will be easier for customers to understand


The proposed bands are:

Universal Credit Claimant (and partner, where applicable)

Not in work or earning less than £284.99 per month

Contribution towards Council Tax - £0 per month.

Earning between £285 and £574 per month.

Contribution towards Council Tax - £35 per month.

Earning between £574 and £1099 per month

Contribution towards Council Tax - £75 per month

Earning between £1099 and £1749 per month

Contribution towards Council Tax - £115 per month.

Earning between £1749 and £2250 per month

Contribution towards Council Tax - £175 per month

Earning between £2250 and £2750 per month.

Contribution towards Council Tax - £225 per month.

Earning over £2750 per month

No entitlement to Council Tax Support.


Our proposed scheme will only look at a claimant's earned income, which includes any money from private pensions from employment.  We will ignore any Universal Credit or any other income which the claimant receives. 

We think that the advantages of this scheme are:


  • Gives stability to those whose wages fluctuate by a small amount each month.
  • People who are receiving Universal Credit but not working or only earning a small amount will receive a full discount (subject to any non-dependent deductions)
  • Less complex and easier for applicants to understand.
  • Allows claimants to earn more money without it necessarily increasing Council Tax payments.
  • Will be simpler to administer and may allow the Local Authority to make savings in administration costs. 

We think the potential disadvantages of this scheme are:


  • Where a person moves up an ‘income band’ their Council Tax increase may be higher than their increase in earnings. 
  • Some people may receive less help than they currently do depending on where their income falls within the bands. 

Impact of this Scheme

Our proposed scheme is not designed to reduce or increase the amount of Council Tax Support the Council currently awards. It is designed to be cost neutral. 


Pensioners and working-age people who are not receiving Universal Credit are not affected by this change, and they will continue to have Council Tax reduction assessed in the same way as they currently do.

 

Most customers (75%) who move onto this new scheme will have little to no change in their Council Tax Support. There are, however some who will have to pay more and some who will have less to pay as detailed below:


Gain/Loss (based on UC CTS caseload August 2018)

Number of claimants

Increase in Council Tax Support over £15 per week

0

Increase in Council Tax Support between £10 and £15 per week

6

Increase in Council Tax Support between £5 and £10 per week

29

Increase in Council Tax Support between £1 and £5 per week

71

No change / change less than £1 per week

525

Decrease in Council Tax Support Loss of between £1 and £5 per week

41

Decrease in Council Tax Support between £5 and £10 per week

15

Decrease in Council Tax Support between  £10 and £15 per week

2

Decrease in Council Tax Support over £15 per week

0

 


Your Views

We would like to know what your thoughts on the scheme are. Please email us at CTSFeedback@stalbans.gov.uk and tell us what you think. Your views are important to us and we will consider all responses before implementing any changes to the scheme. If you wish to submit a response you may wish to consider the following questions:


1)    What do you see as the advantages and disadvantages of what we are proposing?

2)    Would you like to see a different change to the way we help people on a low income pay Council Tax? If so, what would you like to see?

3)    Is there anything else you would like to bring to our attention? 


The consultation period ends on 31st October 2018 after which time the proposal with any appropriate amendments will be put forward to Full Council and if approved will be implemented from April 2019.


 



 

Date of last review: 13 September 2018