Agenda item

Council Tax Reduction Scheme – seeking approval to the introduction of a new Council Tax Reduction Scheme.

15 December 2015

(A) Council Tax Reduction Scheme

Until 2013 there was a national Council Tax Benefit scheme to assist people on low incomes with their council tax bills. This was replaced by a locally determined Council Tax Reduction Scheme (CTRS) from the financial year 2013/14. The Government defined a default scheme which was almost identical to the old Council Tax Benefit scheme. To protect residents on low incomes, the City of London Corporation adopted the Government’s default scheme and subsequently has kept the CTRS in line with Government increases of benefits generally. 

However, changes having been made to national benefits in the July 2015 budget meant that the Scheme would no longer be compliant with legislation. Changes would therefore be required from 2016/17. As this would be a change to the Council Tax scheme, approval would be required from the Court of Common Council. It is obligatory to consult on any changes to the scheme and hence consultation was undertaken with all council tax payers on two options.

Option One was to introduce revised applicable amounts, personal allowances, backdating and non-dependant deductions, keeping these in line with Housing Benefit. This would protect existing claimants from possibly being worse off, although it would also limit backdating in future for new claimants and it would keep the administration of CTRS in line with Housing Benefit. This was the option recommended to Council Tax payers.

Option Two was to make technical adjustments to allow the current scheme to continue broadly as at present, including the current rates of applicable amounts, personal allowances and non-dependant deductions. This would potentially make some claimants worse off and would cause the CTRS to be less aligned with Housing Benefit and other national benefits, but would continue to allow longer backdating for new claimants.

Consultation letters had been sent to 5,800 council tax payers, from whom there were 178 responses. 140 of these responses favoured Option One, 34 favoured Option Two and four stated no preference. Option One was therefore recommended as it would help protect the most vulnerable City residents, and was the preferred option from the consultation. Your Finance Committee agreed that this was the most appropriate option and recommended its adoption to the Court accordingly.

Resolved – That the introduction of a new Council Tax Reduction Scheme, with applicable amounts, personal allowances, backdating and non-dependent deductions in line with the Housing Benefit Scheme (Option One as set out in the report) be approved.