Council Tax Support Consultation
Background to Consultation
What is the consultation about?
Each year, the Council must decide whether to change the Local Council Tax Support (LCTS) scheme for working age applicants in the district. The changes will only affect working age claimants who currently receive LCTS, or who may apply to receive it in the future. The locally agreed proposed changes that we are consulting upon would not affect people of pension age. The LCTS rules for claimants of this age are set nationally by the government. The LCTS Scheme replaced the old Council Tax benefit scheme in 2013.
Our current scheme
In April 2019, the LCTS scheme moved to a banded scheme. This was due to the impact of Universal Credit on customers’ Council Tax accounts and the number of bills they received in a year.
A reduction of 95% of the Council Tax liability is granted to customers where their net weekly income is less than:
- £85.32 for single people, including those with children
- £133.31 for couples, including those with children
Where the customer or a member of the family meets one of the following criteria, and their net weekly income is less than the above, they will receive a reduction of 100 per cent of their Council Tax liability:
- They receive Disability Living Allowance, Personal Independence Payments, Employment Support Allowance support component or the limited capacity for work element of Universal Credit
- They receive Income Support, Employment Support Allowance (income related), Job Seekers Allowance (Income based)
- They receive Carers Allowance, Carers Element of Universal Credit
- They are a lone parent with a child aged under five years old
Other elements of the scheme include:
- Disregarded income: Disability Living Allowance, Personal Independence Payments, Child Benefit & Child maintenance
- If a customer or their partner is in work, the following is deducted from their net weekly income:
- £7.50 - Single person
- £12.50 - Couple
- £25 - Lone Parent & people with a disability premium
- £17 - Lone parents/ disabled people working 16 or over/ couples with children working 30 hours or over.
- A weekly deduction is made from a customer’s weekly entitlement if they have a non-dependent adult in their household. This is based on the gross income of the non-dependent.
- Customers with capital or savings in excess of £16,000 will not be entitled to any support.
- LCTS is limited to a level that would be no more than a band F property.
How much does the current scheme cost?
There are currently 5,910 claimants in receipt of LCTS in the district. 62% of them (3,680) are of working age. This figure is currently fluctuating, due to the current economic financial situation of residents.
The current cost of LCTS is around £7.4 million. This is currently within budget, but the current financial crisis may mean that more residents will qualify. The Council’s Tax base for 2023/24 will reflect any changes to the scheme.
Why is a change to the Local Council Tax Support scheme being considered?
The Council recognises the need to consider the challenges facing residents due to the cost-of-living crisis. The aim of the proposed new scheme would be to help support those on the lowest income, and provide extra support to people who are working.
The options for consideration
We are putting forward the following three options for consultation:
Option 1: Increase the maximum 95% reduction to 100% for all working age customers, increase the income bands by CPI (10.1% based on September 2022) and increase the basic earnings disregards.
Option 2: Increase the maximum 95% reduction to 100% for all working age customers, and increase the income bands by CPI (10.1% based on September 2022).
Option 3: Keep the scheme the same as it is for the current financial year of 2022/23.
Impact on residents currently receiving Local Council Tax Support
Currently there are 1,159 cases whose maximum entitlement is restricted to 95% of their Council Tax liability. 497 of these customers have income below £85.32/£133.31 per week and get a 95% reduction. Under options 1 and 2 mentioned above, this would increase to 100%.
Under options 1 and 2, modelling has indicated that 1,100 residents currently receiving Council Tax Support will benefit from an increase in their reduction. It is likely that more residents could qualify under these options.
The cost of any changes would be shared between major preceptors. The financial cost to South Cambridgeshire District Council is likely to be around £25,000 due to the increased numbers of residents who qualify.
Please refer to the case studies below on how the proposed options might affect various households.
Having your say
This short survey below seeks your views on the proposals on the scheme for 2023/24.
We would like the consultation to be as wide as possible and invite responses from all interested parties, including LCTS claimants and potential claimants, Council Taxpayers, other residents, businesses, town and parish councils, the voluntary sector and advocates and representative groups.
The consultation closes at 5pm on Wednesday 14 December 2022, so please make comments before then.
Mr Blue is a single person on Jobseekers Allowance of £77 per week. His Council Tax is £1,015. he gets £965 Council Tax Support. He currently pays £50 per year.
Under Option 1 & 2 he will not have to pay any Council Tax.
Ms Orange is a single parent with two children aged 7 & 13. She works 20 hours a week and including her earnings her net income is £140.95 per week. Her Council Tax is £1381, she gets £759 Council Tax Support. She currently pays £622 per year.
Under Option 1 & 2 her Council Tax Support would be £966, and she would pay £415 per year
Miss Green is a single person with an adult child living with her. She works 25 hours a week and her net income is £196 per week. Her Council Tax is £1869, she gets £467 Council Tax Support. She currently pays £1402 per year.
Under Option 2 her Council Tax Support would be £748, and she would pay £1121 per year.
Under Option 1 her Council Tax Support would be £1028, and she would pay £841 per year.
Mr & Mrs Pink
Mr & Mrs Pink are in receipt of Universal Credit. Mr D Is disabled and Mrs D works 22 hours a week. Their net income is £208 per week. Their Council Tax is £1869, they get £1028 Council Tax Support. They currently pay £841 per year.
Under Option 2 their Council Tax Support would be £1028 and would pay £841 per year.
Under Option 1 their Council tax Support would be £1308 and would pay £561 per year.
Mr & Mrs Scarlett
Mr & Mrs Scarlett have 3 children aged 8,11 & 14. They are in receipt of Universal Credit and Mr E works 37 hours a week. Their net income is £337 per week. Their Council Tax is £2051, they get £205 Council Tax Support. They currently pay £1846 per year.
Under Option 1 & 2 their Council Tax Support would be £513 and would pay £1538 per year.