Local council tax support hits low-income families

2.4 million low-income families will pay on average £138 a year more in council tax from 1 April 2013, says a new analysis from the Joseph Rowntree Foundation. This is a result of the coalition's replacement of council tax benefit (CTB) in England with localised systems of council tax support (CTS), along with a 10 per cent cut in funding.

Key points

  • In the year beginning April 2013, just 18 per cent of councils will retain the 2012-13 levels of support under new local schemes. 71 per cent will require all working-age adults to pay at least some council tax, regardless of income. 11 per cent will make some changes but these will not affect all CTB recipients.
  • Some 2.4 million low-income families will pay on average £138 more in council tax in 2013-14. This will be subject to wide variations: one million families will pay an extra £100 a year or less: but 150,000 will pay an extra £300 a year or more.
  • 78 per cent of those affected by the changes currently pay no council tax. Councils will have to start collecting, on average, £140 each year from these households (in monthly collections of just under £12). It is 'unclear' how economical it will be for councils to pursue large numbers of low-income families for these sums of money.
  • Two million working-age CTB claimants are already in poverty, and a further half a million are just above the poverty line. Yet an increase in council tax will leave them with even less disposable income.
  • The study's authors comment that it will be a 'curious system' under which a jobseeker on benefit income of £71.70 a week is considered to have enough money to pay some council tax in some parts of the country, but too poor to pay in others.

Source: Sabrina Bushe, Peter Kenway and Hannah Aldridge, The Impact of Localising Council Tax Benefit, Joseph Rowntree Foundation
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