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Change to Council Tax Support Scheme 2014/15 (Council Tax Reduction)

Latest Update - Change to Council Tax Support Scheme 2014/15

A comprehensive 4 week formal public consultation exercise on proposals for the 2014/15 Council Tax Support Scheme took place between 8 November and 6 December 2013.

The proposal to revise the 2014/15 Council Tax Support Scheme consisted of changing the amount of support that is provided through Council Tax Support Scheme for low income, working age households to either 75% of their maximum council tax liability or 80% of their maximum council tax liability. 

The precepting authorities were also consulted with.

The headlines from the consultation are that:

  • 83% (192) of respondents stated that they currently receive Council Tax Support, 16% (38) stated they do not.
  • 78% (163) of respondents stated that they receive other benefits, 19% (39) stated they do not.
  • Results are based on all respondents taking part, unless otherwise stated.
  • Figures have been rounded up/down to the nearest full percentage point.

Please note: Where figures do not add up to 100%, this could be the result of computer rounding, multiple answers, or the exclusion of don't knows/not stated.

On 17 December, Nottingham City Council Executive Board approved the changes to the Council Tax Support Scheme proposed for 2014/15 and recommended to Full Council the adoption of a Council Tax Support Scheme for 2014/15 incorporating changes outlined in the report. 

The Executive Board report is available here.

On 27 January 2014 Nottingham City Council adopted the Council Tax Support Scheme to take effect from 1 April 2014. This means that low income, working age households will receive a maximum of 80% help with their Council Tax bill (they will pay at least 20% of their Council Tax Bill in 2014/15).

The report to Full Council is available here.

Why have things changed?

Last April, the Government abolished Council Tax Benefit and gave responsibility for Council Tax Support to councils but cut the money given to councils to do this by at least 10% compared to their support for Council Tax Benefit.

Nottingham City Council opposed this but was required by the Government to implement a new scheme.

The change meant that everyone, except low-income pensioners, had to pay something towards their Council Tax bills from 1st April 2013.

What did Nottingham City Council do?

Following consultation, Nottingham City Council was able to introduce a scheme for one year that meant that low income households of working age received help with up to 91.5% of their Council Tax bill.

The Council was able to do this by using a one-off grant from the Government and finding an extra £1million from council funds. But the Council also made it clear this was for one year only and it was likely there would be a need to pay more next year.

Last year similar councils to Nottingham (like Leicester and Derby) put in place a scheme that only provided help with up to 80% of their Council Tax bills.

Why is this changing again?

The Government has indicated that, from April next year, it will cut the money it provides to councils generally. In addition, the Government has also indicated that it will not provide the one-off grant next year.

This means that the Government is contributing less money to fund council services and local people and businesses in general are contributing more.

Therefore the Council must look again at how much it can help low income households with their Council Tax bills for 2014/15. Some other cities have already decided that they will provide between 75% and 80% help with Council Tax bills.

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What changes are you asking me about?

The proposals we are considering for changes to the Council Tax Support Scheme for 2014/15 are either:

1)  To provide up to 75% support to low income households of working age. This means that all working age people would pay at least 25% of their Council Tax bills. This would not require additional money from the Council's budget; OR

2)  To provide up to 80% support to low income households of working age. This means that all working age people would pay at least 20% of their Council Tax bills. The Council would need to find an additional £1million to subsidise this, which may mean making savings from other services provided to Nottingham citizens to pay for this in 2014/15.

The amount you will have to pay in 2014/15 will depend on the valuation band of your home, how many adults are living there and your financial circumstances. The table below gives an idea of the lowest amount that would need to be paid based on the current annual Council Tax amounts.

Financial Year 2013/14 (91.5% maximum liability) - Current Scheme

Situation

Council Tax for year (£)

Monthly paid over 10 months (£)

Monthly paid over 12 months (£)

Fortnightly amounts (£)

Weekly amounts (£)

Band A - Home with one adult

69.75

6.98

5.81

2.68

1.34

Band A - Home with more than one adult

93.00

9.30

7.75

3.58

1.79

Band B - Home with one adult

 81.758.186.813.141.57

Band B - Home with more than one adult

109.0010.909.084.192.10

Financial Year 2014/15 - (75% maximum liability) - Option 1

Situation

Council Tax for year (£)

Monthly paid over 10 months (£)

Monthly paid over 12 months (£)

Fortnightly amounts (£)

Weekly amounts (£)

Band A - Home with one adult

205.4720.5517.127.903.95

Band A - Home with more than one adult

273.9627.4022.8310.545.27

Band B - Home with one adult

239.7223.9719.989.224.61

Band B - Home with more than one adult

319.6231.9626.6412.296.15

Financial Year 2014/15 - (80% maximum liability) - Option 2

Situation

Council Tax for year (£)

Monthly paid over 10 months (£)

Monthly paid over 12 months (£)

Fortnightly amounts (£)

Weekly amounts (£)

Band A - Home with one adult

164.3816.4413.706.323.16

Band A - Home with more than one adult

219.1721.9218.268.434.22

Band B - Home with one adult

191.7719.1815.987.383.69

Band B - Home with more than one adult

255.7025.5721.319.834.92

Please note: Support for low income pensioners will not be affected by the proposals.

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What is Council Tax?

Council Tax is a local tax set by councils based on the value of your property at 1 April 1991. Your home is placed in one of eight valuation bands from A - H.

Your council is responsible for collecting Council Tax and this money helps pay for local public services, including refuse collection, social care, environmental health and parks. Some of the money collected is passed to local police and fire authorities to pay for the services they provide.

Who would be affected by the change?

Everyone who currently or who might need help through the Council Tax support scheme will be affected by the changes, apart from low income pensioners.

What will not change?

Currently when we calculate Council Tax support, we look at the amount of money the household has to live on. Certain benefits, such as Child Benefit, Disability Living Allowance and Personal Independence Payments are not taken into account, this will not change.

  • Households with children. Childcare costs will continue to be treated in the same way as we do now. Child Benefit will not be taken into account when we calculate income.
  • Households with a disabled person. Disabled people will continue to receive an additional allowance towards living costs when we calculate income. Benefits such as Disability Living Allowance or Personal Independence Payments will not be taken into account when we calculate income.
  • Households with a carer. Carers will continue to receive an additional allowance towards living costs when we calculate income.
  • Households with a war widow or disablement pension. War pensions will not be counted when we calculate income.

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What this consultation does not cover

There will be no change to the amount of help that low income pensioners currently receive.

The 25% single person's discount and the exemption for people who are severely mentally impaired and live on their own, have not changed and are not part of this consultation.

A full list of the current Council Tax discounts and exemptions is available online at www.nottinghamcity.gov.uk/counciltax

How would this affect different households?

Capping the Council Tax Support at either 75% or 80% of maximum council tax liability.

The proposed change to the current scheme will mean that everyone of working age will pay at least 20% towards their Council tax bill or even as much as 25%.

Single Person
Lives in a band A property and receives a single person discount. He has an income of £71.70 per week (Job Seekers Allowance)

Current Scheme:

This means:

His weekly Council Tax bill is £21.07 per week.

  • It is reduced by a Single Person Discount of £5.27
  • He gets £14.46 per week help through the Council Tax Support Scheme

He has to pay £1.34 per week towards his council tax.

Proposed scheme 75% maximum liability

This means:

His weekly Council Tax bill is £21.07 per week.

  • It is reduced by a Single Person Discount of £5.27
  • He gets £11.85 per week help through the Council Tax Support Scheme

He has to pay £3.95 per week towards his council tax.

Proposed scheme 80% maximum liability

This means:

His weekly Council Tax bill is £21.07 per week.

  • It is reduced by a Single Person Discount of £5.27
  • He gets £12.64 per week help through the Council Tax Support Scheme

He has to pay £3.16 per week towards his council tax.

Single Parent
Lives in a band A property with one child aged 15 years. She receives a single person discount. She has income of £266.77 per week (Earnings and Tax Credits)

Current Scheme:

This means:

Her weekly Council Tax bill is £21.07 per week.

  • It is reduced by a Single Person Discount of £5.27
  • She gets £4.49 per week help through the Council Tax Support Scheme

She has to pay £11.31 per week towards her council tax.

Proposed scheme 75% maximum liability

This means:

Her weekly Council Tax bill is £21.07 per week.

  • It is reduced by a Single Person Discount of £5.27
  • She gets £1.93 per week help through the Council Tax Support Scheme

She has to pay £13.87 per week towards her council tax.

Proposed scheme 80% maximum liability

This means:

Her weekly Council Tax bill is £21.07 per week.

  • It is reduced by a Single Person Discount of £5.27
  • He gets £2.72 per week help through the Council Tax Support Scheme

He has to pay £13.08 per week towards her council tax.

Two Parent Family
Live in a band B property with two children under 10. They have income of £372.69 per week (Earnings and Tax Credits)

Current Scheme:

This means:

Their weekly Council Tax bill is £24.59 per week.

  • They get £12.77 per week help through the Council Tax Support Scheme

She has to pay £11.82 per week towards their council tax.

Proposed scheme 75% maximum liability

This means:

Their weekly Council Tax bill is £24.59 per week.

  • They get £8.77 per week help through the Council Tax Support Scheme

They have to pay £15.82 per week towards their council tax.

Proposed scheme 80% maximum liability

This means:

Their weekly Council Tax bill is £24.59 per week.

  • They get £10.00 per week help through the Council Tax Support Scheme

They have to pay £14.59 per week towards their council tax.

Two Parent Family - both are disabled
Live in a band C property with four children under 10. They have income of £440 per week (Income Support and Disability Benefits)

Current Scheme:

This means:

Their weekly Council Tax bill is £28.10 per week.

  • They get £25.71 per week help through the Council Tax Support Scheme

She has to pay £2.39 per week towards their council tax.

Proposed scheme 75% maximum liability

This means:

Their weekly Council Tax bill is £28.10 per week.

  • They get £21.08 per week help through the Council Tax Support Scheme

They have to pay £7.02 per week towards their council tax.

Proposed scheme 80% maximum liability

This means:

Their weekly Council Tax bill is £24.59 per week.

  • They get £22.68 per week help through the Council Tax Support Scheme

They have to pay £5.42 per week towards their council tax.

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How you can have your say

This consultation is now closed and all feedback has now been analysed.

Further information

If you have any questions about the information outlined in this document or if you need help to take part, please phone 0115 915 4944 or email engage@nottinghamcity.gov.uk

Details of current Council Tax discounts and exemptions and Council Tax bands can be found on our website - www.nottinghamcity.gov.uk/counciltax

What will happen next?

We have a duty to agree our Council Tax Support Scheme on or before 31 January 2014.

Council will consider the recommendations of the Executive Board at the Full Council meeting on Monday 27January 2014. 

Click here for the Report to Full Council

Need any help?

If you are finding it hard to pay your bills and need help in managing your money you can get advice from the following organisations.  They all provide free, impartial, independent and confidential help:

NamePhone NumberWebsite
Nottingham City Council Welfare Rights Team 0115 915 1355

www.nottinghamcity.gov.uk/welfarerights

Refugee Forum 0115 941 5599

www.nottsrefugeeforum.org.uk

Nottinghamshire Deaf Society 0115 970 0516 www.nottsdeaf.org.uk
National Debt Line 0808 808 4000

www.nationaldebtline.co.uk

Citizens Advice Bureau

0844 8487997 (from land line)
0300 3305457 (from mobile)

 www.citizensadvice.org.uk
Nottingham Law Centre 0115 978 7813

www.nottinghamlawcentre.org.uk

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