Consultation on our Local Council Tax Support Scheme 2020/21

Consultation on our Local Council Tax Support Scheme 2020/21

Consultation on our Local Council Tax Support Scheme 2020/21

Introduction

Local Council Tax Support (LCTS) is a means-tested discount to help people on low incomes pay their Council Tax. It is a local scheme run by North Somerset Council that replaced Council Tax Benefit. No money is paid to the people who claim it. Instead, we reduce their Council Tax bill be the amount of support they are entitled to.

On 1 April 2013 Central Government ended the national Council Tax Benefit Scheme and gave responsibility for designing and administering LCTS to Local authorities. The Local Council Tax Support Scheme (LCTS) was introduced to replace the previous national Council Tax Benefit Scheme.

North Somerset Council administers the Local Council Tax Support Scheme (LCTS) for both pensionable age and working age residents. The council operates the scheme for working age at it’s own discretion, whereas the scheme for pensioners is prescribed by Government. Both schemes provide a discount on Council Tax liability for those residents on low income that quality under the eligibility criteria.

Under the current scheme, everybody of working age who receives LCTS must pay a contribution of 27.5% towards their Council Tax bill. This means the maximum support working age applicants receive is 72.5% of their Council Tax bill.

This means if an annual Council Tax bill is £1000, a qualifying resident can get up to £725 Council Tax support. Pension-age applicants continue to receive up to 100% support.

Currently 12,400 households claim LCTS, including pension-age applicants. Of these, approximately 7,000 are of working-age.

Why is a change to the Local Council Tax Support Scheme being considered?

We are considering changing our Local Council Tax Support scheme to provide additional support and alleviate financial pressures on low income families.

As part of the council’s Medium Term Financial Planning the council is consulting on making changes to the scheme, with three options.

How may this consultation affect me?

Everyone liable to pay Council Tax pays for the Local Council Tax Support Scheme through their Council Tax payments. Therefore, it is important to get the views of all Council Tax payers regardless of whether you receive Council Tax Support or not.

Any changes to the scheme will directly affect working-age households receiving Local Council Tax Support now or in the future.

Central Government set the scheme for pension-age applicants and they will not be directly affected by any changes.

It is important you have all the information you need to provide informed answers. Our current Local Council Tax Support Scheme is provided on the link below:

https://www.n-somerset.gov.uk/wp-content/uploads/2019/03/council-tax-support-scheme.pdf

How and when you can respond to the proposals?

The consultation will run from 1 November 2019 to 29 November 2019.

Next steps

Because of the timescales involved and the legal requirement the Council adopts its scheme by 31 January 2020 at the latest if it is to take effect from 1 April 2020, the consultation must close on 29 November 2019.

A report will be presented to a Council Policy and Scrutiny Panel to put forward the result of the consultation. We will listen carefully to what residents tell us, and the consultation results will be considered alongside other evidence and information for the Council to make the final decision on the scheme to adopt.

Option 1 – Lowering the minimum contribution

Lowering the minimum contribution for working age customers from 27.5% to 24.5% from April 2020

This means if an annual Council Tax bill is £1000, a qualifying resident will get up to £755 Local Council Tax Support

Option 2 – Lowering the minimum contribution over 3 years

Lowering the minimum contribution for working age customers over 3 years from April 2020, thereby lowering the contribution by 1% each year – 2020/21 = 26.5%; 2021/22 = 25.5%; 2022/23 = 24.5%

This means if an annual Council Tax bill is £1000, a qualifying resident will get Local Council Tax Support up to the following amounts –

2020/21 = £735

2021/22 = £745

2022/23 = £755

Option 3 – No change to the current scheme, i.e the minimum contribution is retained at 27.5%

The current scheme allows for low income families an eligibility to Local Council Tax Support but requires a minimum contribution of 27.5% of their full Council Tax bill.

This means if an annual Council Tax bill is £1000, Local Council Tax Support would remain at £725.

Beyond annual uprating of allowances notified by the DWP no further changes to the scheme are proposed.

Question 1

Should the Council lower the minimum contribution to 24.5% from April 2020?



Question 2

Should the Council lower the minimum contribution over 3 years from April 2020, to 26.5% in 2020/21, 25.5% in 2021/22 and 24.5% in 2022/23?



Question 3

Should the council continue with the current scheme with no changes to the minimum contribution of 27.5%?