Tell us your views on Council Tax banded support scheme proposals

Date: 

Friday, 3 December, 2021
Surrey Heath Borough Council is asking for residents’ views on a new Council Tax banded support scheme.  
 
SHBC’s Local Council Tax Support Scheme (LCTSS) helps working-age people who have a low income, to pay their council tax. 
 
The proposed changes to the scheme, discussed at the Executive meeting of 16 November 2021, will affect only working-age residents. Pensioners are protected under separate legislation, and are not affected by our current scheme, or the proposed changes that are the subject of this consultation. 
 
Under the new proposals, the Council would take into account households’ earned income and certain other specified benefits when calculating any Council Tax support a household may be eligible for. Universal Credit would be fully disregarded in any calculations.  
 
Under the proposal new bands would be introduced, made up of income brackets. Households and individuals liable to pay Council Tax will be able to look at their own income from earnings and easily identify which band applies to them. 
 
They can therefore see if they qualify for Council Tax Support, and if so, how much they will receive. Each band would have a threshold, removing the need for entitlement changes where there are small increases in earned income. 
 
The proposed changes would take effect from 1 April 2022, and relate to the 2022/23 financial year.  
 
Surrey Heath Portfolio Holder for Finance, Cllr Robin Perry, said: “We are proposing to change the way we work out how much Council Tax Support we give working age residents.  
 
“This change will see us move to a system which is fairer, more efficient, and more flexible. It is also more transparent and easier for people to understand.  
 
“The current scheme does not work well with the Government’s Universal Credit - it means multiple changes in Universal Credit inevitably lead to multiple changes in Council Tax Support. That increases the costs of the scheme for all council taxpayers in the borough.   
 
“We want to hear your views on this - I urge as many people as possible to take part in the consultation, to tell us what you think.” 
 
The main changes proposed to the existing scheme are:

Change to the maximum council tax liability available for support:

Two existing percentage rates of 70% maximum and 100% maximum to be replaced with a single rate of 95%.   
 
The maximum percentage of 70% means that even if a claimant qualifies for maximum help towards their council tax charge, they have to pay 30% 
 
eg a council tax charge of £1,000 per year leaves £300 per year still to pay.  
 
The new single rate maximum of 95% would mean that 5% of the total council tax costs would need to be paid once the maximum support has been applied.   

Change to capital limit:   

Two existing upper capital limits of £6,000 and £16,000, to be replaced with a single rate of £6,000.   
 
The upper capital limit means if a claimant has savings of more than £6,000, regardless of their weekly income they would not qualify for help towards their council tax costs.  

Change to other adult resident deductions (non-dependant deductions):  

Four existing weekly deduction rates replaced with two rates - one for employed and one for other non-working adults in the household.   

When a claimant has other adults in the household, like grown up children or parents, the amount of help they can receive is reduced in respect of each person. The current maximum weekly deduction is £12.45 and this would be replaced with a £10 weekly deduction. 

Changes to earnings disregards:   

The four existing weekly disregards to be replaced with a flat rate of £20.   
 
When a claimant has earned income we currently make a deduction from their net pay before we take the earnings in to account. The amount deducted ranges from £5 per week for single people to £25 for families. This will be changed to £20 per week for all claimants. 
 
The consultation period will run from 1-31 December 2021. To share your views please complete the Local Council Tax Support Scheme online survey.
 
If you have any questions, please email revenues@surreyheath.gov.uk 
 
We know the Covid-19 pandemic has affected the finances of many residents and some have been struggling to pay their Council Tax. 
 
If you have had a reduction in your income and have been unable to make payments, you may be entitled to Council Tax Support. Please visit surreyheath.gov.uk/benefits for more details on how to apply or call 01276 707100 for further advice.