Asset Management & Commercialisation, Finance, & Ascot

To consider the outcome of the consultation into the proposed amendments to the Council Tax Reduction scheme for 2023/24.

Cabinet considered the report setting out the outcome of the consultation into the proposed amendments to the Council Tax Reduction scheme for 2023/24.

Councillor Hilton, Cabinet Member for Asset Management & Commercialisation, Finance, & Ascot proposed the recommendations and explained that the Council was obligated in law to review its Council Tax reduction scheme annually. He advised that the review left the council tax reduction rate unchanged at 80% but proposed a number of changes designed to make life easier for CTR recipients and to reduce the Council’s administrative burden.

He clarified that three of the five changes only affected working age applicants who were in receipt of both Council Tax Reduction (CTR) and Universal Credit (UC). There were currently 2,204 working age residents in receipt of CTR and, of these, 1,221 were in receipt of both UC and CTR. The remaining two proposed changes affected all working age applicants.

Councillor Hilton explained the five proposed changes:

1.     Universal Credit Customers – limited reassessments 

The proposal was to only re-assess these claims three times per year, unless a customer had a significant change such as starting or stopping work. When re-assessed, all changes would be processed so the overall net financial effect would be the same, but the number of adjusted Council Tax bills issued to customers would be many fewer. He stated this would neither decrease nor increase the level of CTR for customers.

2.     Universal Credit Customers – automatic re-awards

This proposal would mean that any UC customer who lost entitlement as a consequence of a slightly higher level of income for one UC assessment period of four weeks, would not need to submit a new claim for CTR if they subsequently re-qualified. He stated this would neither increase nor decrease the level of CTR for customers but would make the process of re-gaining support easier.  

3.     Universal Credit – net vs gross income 

Currently, if a UC customer has a deduction from their UC income as a consequence of repaying a loan to the Department of Work and Pensions, the net UC income was taken into account when assessing entitlement to CTR. This was at variance with other Benefit Income where regulations require the gross income to be used. The proposal was to amend the scheme to equalise the treatment of UC customers by taking their gross award e.g. the amount of UC they should be receiving if deductions were not made. He stated that this would not be beneficial to these UC customers who are repaying a loan as they would get less CTR but would be fair. 

4.     All working age customers – backdating

It was proposed that the current one-month time limit for backdating was amended to be three months where the customer has proven good cause for failing to apply at an earlier date. This brought working age customers in line with pensions who receive CTR. He stated that this would be beneficial to customers. 

5.     All working age customers – annual uprating

The final proposal was to ensure the scheme aligned to changes introduced to the national Housing Benefit scheme, where the rules were set by the Department of Work and Pensions or the pensionable age CTR regulations which were amended by the Department of Levelling Up Housing and Communities. He stated that this would be largely beneficial to customers and was what the Council had done since the scheme was introduced. 

Councillor Hilton reported that an extensive public consultation exercise had been undertaken from 2 September to 2 December 2022 which had included: a link on the Royal Borough’s website, posters put up in the libraries and where details were held an e-mail issued to recipients of CTR and residents liable for Council Tax. He stated that in total 499 responses were received, compared with 191 responses in October 2020. The lowest support was from 77% of respondents and the highest 86% to the proposals.

He concluded that the Council had looked carefully at the comments made including the alternative proposals suggested as to savings/revenue generation.

Louise Freeth, Head of Revenues, Benefits, Library and Residents Services reiterated the Council’s duty to review its Council Tax reduction scheme annually. She stated that the Council was no longer operating a two-tier system but a three tier because of the disparity between those working age customer who were on universal credit and those who were not. The Council was trying to simplify things for residents as well as making the application of the scheme more efficient. She explained that it could be very confusing for a working resident on universal credit who receives a slight fluctuation in their salary as this could mean up to 13 Council Tax Bills within the year making it very difficult for them to understand what was due when. In addition officer time to make those changes.

The Council can provide support to any residents suffering financial hardship and in addition has been asked by DLHUC to provide residents both of working age and pensionable age up to £25 off their Council Tax bill if they are in receipt of Council Tax support. The Council has £113,000 to help residents with increased charges.  

Councillor Johnson, Leader of the Council seconded the recommendations.

RESOLVED UNANIMOUSLY that the report and, in particular the feedback from the consultation be noted; and

RECOMMENDED to COUNCIL that the proposed amendments to the Council Tax Reduction scheme for the financial year 2023/24 be approved.