Make sure you have your say on council tax support

Cheltenham Borough Council is asking residents for their views on council tax support.

Options to change the current local council tax support scheme

There are currently 3,600 working age people in Cheltenham who receive council tax support. Many are unemployed or unable to work due to illness and will receive 100 per cent council tax support meaning that they do not pay any council tax. Other current recipients receive council tax support based on the income they have. Any increase or decrease in income has an effect on the amount of council tax support awarded and every time a reassessment is carried out a new council tax bill is issued with revised instalments.

There are a number of changes being considered which will reduce the administrative burden, simplify the claim process, provide customers with vital financial support and reduce the number of in year reassessments carried out. These options form the consultation questions which you are being invited to answer, to help us shape our new scheme.

Below are some examples to illustrate how certain changes to the council tax support will affect those receiving help.

Example 1 - Introduce a scheme where all working age applicants pay a percentage of the charge

We currently allow all working age customers to claim up to 100 per cent support towards their council tax, depending on their income and household circumstances.

This option would require all applicants who claim council tax support to pay a minimum of 10 per cent, 15 per cent or 20 per cent of the council tax. Reducing this support would mean that some working age applicants would need to make payments whereas they do not currently have to.

We are mindful that any minimum payment should be affordable given the household’s circumstances so that we will be able to collect payments due.

Example 2 - Introduce an income banded scheme

We currently carry out a means test and compare the applicant’s income to a range of allowances and premiums set annually by central government. The lower a person’s income the more council tax support they will receive. However every change of income results in an adjustment to the applicant’s council tax support which then generates a revised council tax bill with different instalments to pay.

Introducing a scheme based on income bands would avoid multiple changes to the amount of council tax support and therefore reduce the number of council tax bills issued throughout the year, providing the income remained in the same income band.

This will be less confusing for council tax payers receiving council tax support, particularly those who receive Universal Credit, as their income is reassessed by the DWP every month. This currently results in a reassessment of their council tax support, despite how small the change is. 

It is a clear and simple change to the current scheme, potentially making administrative savings and it would help people budget over longer periods.

Example 3 - Introduce a capital limit of £6,000

Currently a working age applicant can have capital (cash savings, money in the bank and investments, but not including the value of a person’s house) up to £16,000 and still qualify for council tax support. The applicant may receive up to 100 per cent council tax support and not have to pay any council tax.

If the capital limit was reduced to £6,000 those with modest capital would still be able to apply for and receive assistance. However those applicants who have capital in excess of £6,000 would no longer qualify for any support and would have to pay 100 per cent of their council tax liability.

Example 4 - Introduce changes to the income that is disregarded in the calculation

We currently ignore certain income (either in part or in full) in our council tax support scheme. For example, child benefit and maintenance payments in respect of a child are disregarded in full in the calculation of council tax support.

If changes were made to how much income was used in the calculation and certain types of income were taken into account, it would mean that the applicant receives less council tax support and would result in them having to pay more council tax.

Example 5 - Discontinue the payment of Second Adult Rebate

If a single applicant does not qualify for council tax support themselves, there is a provision for them to claim something called Second Adult Rebate. This can be awarded up to 25% of the council tax liability and is based on other people’s income in household, for example an elderly relative or grown up children still living in the applicant’s home.

If Second Adult Rebate is discontinued it will result in some people having an increase in their council tax payments of between 7.5 per cent and 25 per cent. Second Adult Rebate is a lesser known benefit and is paid by us to less than 40 working age applicants. It can be more difficult to administer as it is not based on the applicant’s income and as a result applicants often fail to notify us of changes to the other people’s income.

Who are we consulting?

The consultation in respect of changes to the council tax support scheme for 2019-20 is open to everyone who lives in Cheltenham (regardless of whether they currently claim benefits and/or council tax support) or works or studies in the town and wants to have their views heard. We are keen to hear the views of a cross section of Cheltenham residents.

When and how are we consulting?

The consultation will run for a period of six weeks, starting Monday 23 July and ending on Friday 7 September 2018.

We encourage people to complete our online survey as this will capture answers to the key questions we are asking.

However if you are unable to complete the online survey or would like to share your comments with us you can:

The address to use for correspondence is: Revenues and Benefits Service, Cheltenham Borough Council, Municipal Offices, The Promenade, Cheltenham. GL50 9SA

What happens after the consultation period has ended?

We will use the information collected from this consultation to help make our decision on the changes to the council tax support scheme from 1 April 2019.

The results from the consultation will be published here later this year.

Work will take place to design a revised council tax support scheme which will be considered as a full council meeting in October 2018. The scheme will then be reflected as a discount on council tax bills for 2019/20.