Council Tax Support Scheme 2021/22 Consultation


Background to the Consultation

What is this consultation about?
Each year South Somerset District Council has to decide whether to change the Council Tax Support Scheme for working age applicants in its area. This year the Council has decided that changes should be made to significantly change the Council Tax Support Scheme to:
  • Make the scheme easier for residents to understand and access
  • Increase the level of support for those applicants on the lowest incomes.
  • Provide greater stability to those who are in receipt of support.
  • Make the scheme work better with the Universal Credit award system.
  • Build in capacity to better manage increase in demand.
  • Reduce administration costs which will ultimately prevent any additional costs being added to the Council Tax.
What is Council Tax Support?
Council Tax Support is a discount for Council Tax. The level of discount is based on the income of the household. Currently the maximum discount is 85% of Council Tax for most working age households and 100% for pensioners.
Why is a change to the Council Tax Support scheme being considered?

In April 2013 the Council Tax Benefit Scheme was replaced by a new Council Tax Support Scheme. Council Tax Benefit had been funded by the Department for Work and Pensions and supported people on low incomes by reducing the amount of Council Tax they have to pay.
The Council Tax Support Scheme is determined locally by South Somerset District Council rather than the Department of Work and Pensions. Although the Government initially provided funding for the scheme, the funding has reduced each year in line with the reduction in Revenue Support Grant provided to councils. 
Applicants in receipt of income-based Jobseekers Allowance, Income Support and Income Rated Employment and Support Allowance receive the maximum level of support. Others receive a amount of Council Tax Support based on a number of factors including the make up of the household, income and disability. 
A separate Central Government scheme is retained for people of pension age and Councils are only able to vary their schemes for people of working age.
Each Council is required to review their schemes each year and decide if they want to make any changes. Before any changes can be implemented, they must be subject to public consultation.
South Somerset District Council is proposing a number of changes to its existing scheme and, in line with legislation, we have a duty to consult you and provide you with the opportunity to tell us your views on the proposed changes to our Council Tax Support Scheme.
The Council is consulting on the following changes to its scheme for 2021/22 (more detail on the change options is given further in the consultation):
  • Introducing an income ‘grid’ scheme for all working age applicants replacing the current scheme which was based on the previous Council Tax Benefit Scheme. This will provide up to 100% support in certain cases (currently there is a maximum of 85%). (Option 1);
  • Limiting the number of dependent children used in the calculation of support to two for all working age applicants to provide consistency with the Department for Work and Pensions benefit schemes.(Option 2);
  • Removing Non-Dependant deductions – the current scheme makes a deduction for members of the household who are not financially dependent, e.g. adult children.  (Option 3);
  • Disregarding the Housing Element of Universal Credit (in the same way that Housing Benefit is not considered income) and also disregarding the Support Component of Employment and Support Allowance and Carer’s Allowance in the calculation of income. (Option 4);
  • Replacing the current earnings disregards (also known as a work allowance) with a standard £25 disregard for all applicants where they are in work. (Option 5);
  • Where a person is disabled and in receipt of certain disability benefits, awarding an additional disregard from their income before calculating any entitlement to Council Tax Support. (Option 6);
  • Removing the Extended Payment provision. (Option 7);
  • Calculating all new claims and changes in circumstances to be effective of the day of the change in line with the discount schemes, rather than the current (benefit based) weekly basis. (Option 8);
  • Allowing the discretion to backdate any discount up to 12 months where a good reason is provided. (Option 9). 

Protecting the most financially vulnerable.
By ensuring that the scheme protects the financially vulnerable with the maximum support, the Council is likely  to reduce spending in other poverty related areas making a significant contribution to the health and wellbeing of South Somerset residents.

What are the drawbacks of doing this?
  • Whilst the Council will look to protect Council Tax Support recipients as far as possible, there may be a few winners and losers; and
  • Some higher income households may receive less support
In the South Somerset District area, almost 10,000 people currently receive Council Tax Support. The gross cost of the scheme is £9.6 million which is spread across the District Council (9%), the County Council (68%), Fire (5%), Police (12%) and local preceptors (6%) in accordance with the proportion of Council Tax which each organisation levies (which is shown in brackets).
Who will this affect?
Working age households in the South Somerset District area who currently receive or will apply for Council Tax Support.

Pension age households will not be affected as Central Government prescribe their scheme.

Are there any alternatives to changing the existing Council Tax Support Scheme?
We have thought about other options. These have not been completely rejected (including maintaining the current scheme) and you are asked about them in the questionnaire, but, at the moment we do not think we should implement them for the reasons given.
We have considered:
  • Continuing with the current scheme
    This would mean less support for the lower income households and higher administration costs generally. Not making the   proposed changes would significantly increase the administration of Council Tax Support. The current scheme does not work effectively with the Government’s Universal Credit system. The multiple changes in Universal Credit inevitably lead to multiple changes in Council Tax Support which also impact collection of the charge. This would increase the costs for all council tax payers in the District paying towards the scheme.  The decision to increase Council Tax may need to be made by voting in a local referendum; or;
  • Reduce funding to other Council services to pay for additional administration costs
    Keeping the current Council Tax Support Scheme will mean an increase in administration costs and less money available to deliver other Council services.

1. I have read the background information about the Council Tax Support Scheme:
This question must be answered before you can continue. *