Bolton Council is making changes to the way council tax benefit is decided for working age households from April 1, 2013.
The government has ended the National Council Tax Benefits Scheme and made each council responsible for deciding how it calculates council tax benefit. The government has also reduced the amount that it gives to councils to cover the benefits by approximately 13%.
Therefore the council must make savings from the £25m given out in council tax benefit, while protecting the most vulnerable such as pensioners and those on the lowest incomes, and whilst the number of claims is increasing.
The council is proposing to save £500,000 from the scheme with the rest of the £1.5m savings to be found from other council services.
Pensioners who currently receive council tax benefit for any reason will still be eligible in the future and will not be affected by these proposals.
There are a number of proposals being considered by the council to save this £500,000. One proposal is to restrict the amount of benefit paid to people in higher banded properties. At the moment council tax benefit is paid based on whatever band a person’s property is in. The proposal is to restrict the maximum amount a person could receive to Band C even if they live in a property that is band D to H.
A second proposal is to reduce the savings threshold to £6,000. Currently, people with savings of £16,000 or more are asked to use these savings to pay their council tax before making an application for council tax support. The proposal is to reduce this threshold to £6,000.
A third proposal is to abolish backdated claims for council tax benefit. Under the current rules the council can consider backdating the claim to up to three months prior to the date the claim was made. The proposal is to abolish this right and award claims from the date of application.
Another proposal is to abolish second adult rebate. Currently this compensates households who would normally qualify for single persons discount had they not had another adult living with them. It is often awarded when a grown up son or daughter lives with one of their parents. The proposal is to abolish this rebate as it does not take into account the claimant’s income. The second adult would be expected to contribute.
A further proposal is to set up a minimum payment threshold. Currently even if council tax benefit is assessed at 1p the council pays this. The proposal is to limit the minimum payment to £1 from 1 April 2013.
The final proposal is to include more of a person’s weekly income. At the moment certain other benefits or part of a salary are not included in the calculation for a person’s weekly income. The proposal is to disregard less of a person’s working wage, and to include any maintenance for children or spouse, when working out how much a person’s weekly income is.
Leader of Bolton Council, Councillor Cliff Morris said: “As the government is reducing the amount which it gives to councils, we must change the system of how we calculate council tax benefits. We are looking at making a number of changes, but we are determined to protect the most vulnerable people and ensure that these changes have least impact on them. There will be no impact at all on pensioners and those on the lowest of incomes, who will still receive the same amount of benefit which they were entitled to previously. We will be consulting widely and we’d like to encourage everyone to visit our website and give their views.”
The council is now consulting about the proposals to change the council tax benefit system. Everyone currently entitled to Council Tax Benefit, except for pensioners, could be affected by these changes. Other residents may also be affected by the proposed changes as they may move onto benefit in the future, so it’s important that everyone has their say.
People can qualify for council tax benefits for a whole range of reasons, and 32,300 people currently receive it in Bolton. However, only around 3,000 of these people are likely to be affected by any changes made.
Customers who could be affected, and groups representing them, are being contacted for their views and a survey is also available on the council website for everyone – www.bolton.gov.uk/website/pages/Counciltax.aspx – with a paper version on request.