From 1 April 2013, the current council tax benefit scheme is being abolished by the Government.
Council tax benefit is claimed by low or no income households to help them pay their council tax. Currently it is a nationally regulated scheme, with rules about who is entitled set by the Department for Work and Pensions (DWP).
All local authorities have been required by the Government to design their own local schemes to support those who need help with their council tax. The scheme is only applicable to working age households as pensioners are protected and will not see any changes in their assessments as a result of the new scheme.
The Government will be reducing the funding available to local authorities to deliver the new scheme, which will mean that there will be less money available to support working age residents. In the East Riding in 2011/12 around £23 million was spent on council tax benefit. The funding for 2013/14 will be reduced by at least £2.5 million. Savings will need to be made by either reducing the support provided to working age claimants or by finding savings elsewhere in the council’s budget.
The council currently processes and pays around 28,000 council tax benefit claims of which around 15,500 (58 per cent) are pensioners who are excluded from the changes and will continue to be protected under the existing scheme.
Three options for a new scheme were put to the council’s cabinet in July. The council’s preferred option is the one that limits the amount of help residents could receive towards their council tax bill to 75 per cent. This would still result in the council having to find £1.2 million savings to fund the scheme.
The preferred scheme option follows the same rules as the existing council tax benefit scheme, except that there will be a reduction to the amount of liability for which benefit can be awarded. The maximum will be 75 per cent. This means that no-one will receive 100 per cent support towards their council tax, so every working age household in the East Riding will have some council tax to pay.
Councillor Stephen Parnaby OBE, leader of the council, said: “The budget the council receives to pay council tax support will be reduced by £2.5 million in 2013/14 and therefore the council must make difficult decisions by reducing the amount of help people can have towards their council tax bills or by finding additional savings from elsewhere in the council budget.
“I must stress that the changes to council tax benefit are entirely the result of Government policy and not anything decided locally by this authority.
“The council has worked closely with many people and groups before drawing up the various options. The general view has been that it is difficult to treat one group who may be vulnerable in a more or less favourable way than another group, so most consultees at this stage think a reduction in benefit across the board is the fairest way to proceed.”
This change will have a major impact on many households in the East Riding and therefore a consultation exercise is taking place from now until 12 October 2012 to enable people to give their views.
Information about the changes can be found on the website at www.eastriding.gov.uk/counciltaxsupport
People can complete the questionnaire online or print it and return to the Research Group (ref CTB). East Riding of Yorkshire Council, FREEPOST NEA 8623, Beverley, East Riding of Yorkshire, HU17 0BR. Alternatively, you can visit your local customer service centre for a paper questionnaire or for help completing the online version. The council will also be conducting a postal survey with a random selection of residents.
Once the consultation is complete, the results will be presented to the council’s cabinet in November 2012 and the Full Council in January 2013 who will make a final decision on the new scheme.
All existing council tax recipients will be transferred to the new scheme automatically on 1 April 2013.