Shropshire Council

Changes to the Council Tax Benefit Scheme

  • Period: 19 October 2017 - 26 November 2017
  • Status: Closed
  • Audiences: Everyone
  • Topics: Council tax
  • Type: Public

The former national Council Tax Benefit Scheme was abolished on 31 March 2013 and replaced with a new system of localised council tax support, which requires each billing authority to design and implement its own scheme for awarding council tax discounts to working age customers on low incomes, while accommodating a 10% reduction in government funding.

Shropshire Council’s scheme was approved by cabinet on 17 October 2012. Effectively the scheme agreed by Shropshire Council continued to be means tested but made a number of adjustments to the existing council tax default scheme, namely:

  • Removal of second adult rebate
  • Increase the value of non-dependant deductions
  • Removal of child benefit and earnings disregards
  • Reducing the upper capital limit to £10,000
  • Minimum earnings threshold for EEA
  • Special education needs allowance disregarded in full
  • War pension/armed forces compensation scheme guaranteed income payments disregarded in full
  • Changes to habitual residency test to fall in line with housing benefit

Crucially, the Shropshire Council scheme didn't implement a minimum payment percentage across all claimants. That means that certain claimants in receipt of passported benefits still receive 100% protection and pay no council tax.

This means that in 2017/18 Shropshire Council is one of only 20% of councils that still provide 100% protection through its local Council Tax Support Scheme.

Legislative changes have continued to be made in relation to housing benefit, which is currently assessed alongside council tax support as part of the same assessment process.  These changes have not been reflected in the Council Tax Support scheme.  As housing benefit and the Council Tax Support Scheme have diverged it has made the assessment process more confusing for claimants, and more administratively challenging for staff.

Shropshire Council is facing an extremely challenging financial future, and central government has made it clear that councils should look to maximise locally generated income to help manage the situation, and to support the continued delivery of key and critical services now and in the future. We now need to decide if further changes are needed to the scheme to help make more savings. Our key strategic risk is the ability to set a sustainable budget. The changes being proposed to the Council Tax Support Scheme would form part of a long-term sustainable solution. If changes aren't made to the scheme then, due to national funding cuts, we'll have to find savings in other parts of the budget, for example by making cuts to service delivery or stopping the delivery of certain services altogether.

Our financial strategy gives further background information.

We're now seeking views from all residents, including those currently in receipt of council tax support, as well as other interested individuals and organisations, about proposed changes to our Council Tax Support Scheme that would take effect from 1 April 2018.

Our cabinet considered the options around this on 18 October 2017 and proposed that we should consult on the changes detailed below. More details about the proposed changes are in the cabinet report.

Who would be affected?

People receiving council tax support of working age, and not classed as severely disabled, would be directly impacted by the proposed changes. Anyone who may need to claim in the future may also be affected. The changes would have an impact on people both in and out of work. 

Proposed changes

We're proposing to make the following changes to our scheme with effect from 1 April 2018. (Shropshire Council’s Council Tax Support Summary document, which is appendix A of the report that was considered by our cabinet on 18 October 2017, provides more details about these changes, and appendix C provides some examples of how they would impact on the calculation of council tax support):

  • Make changes to our current scheme to align with housing benefit changes
    • Removal of the family premium
    • Applying the two child limitation
    • Restricting backdating to a maximum of one month
    • Bereavement support payments and payments from either the ‘We love Manchester Fund’ or the ‘London Emergency Trust’ to be disregarded in full
    • Absence from home to be limited to four weeks when outside GB
    • Beneficial changes to be reported within one month of date of change
  • Apply a minimum award of £1.50
  • Introduce a de minimus amount of £10 per week for claimants in receipt of universal credit
  • Apply a minimum 20% payment in council tax support

In order to ensure that the most vulnerable groups in society are protected it's proposed that the following will be exempt from the 20% minimum council tax support payment:

  • Claimants in receipt of severe disability premium
  • Claimants in receipt of the support component of employment and support allowance
  • Claimants in receipt of war pension

We estimate that changing our Council Tax Support Scheme in this way will reduce the cost of the scheme by £1.1 million per year. We could continue to provide the same level of support as we do under our current scheme, but that would mean finding savings elsewhere within our budget to fund council tax support. We're already committed to the maximum 3.99% council tax increase.

The government says that local schemes should:

  • Support more people into work by ensuring that work always pays
  • Protect the most vulnerable people; and
  • Deliver fairness to those claiming benefit and the taxpayer

To have your say on these proposals, click on the 'How to get involved' tab and complete the brief questionnaire.

Have your say on our proposed changes to the Council Tax Support Scheme by completing a brief questionnaire.

Go to the questionnaire »

Data protection

Information collected in our surveys will only be used by us (Shropshire Council) to inform the immediate and future provision of our services. The information you provide will be kept confidential in accordance with our Privacy Policy. It will not be shared outside of Shropshire Council. Information collected via our online surveys (hosted on the Surveymonkey website) will be stored on SurveyMonkey’s servers in the United States of America and SurveyMonkey gives an undertaking never to disclose the survey questions or your responses to others without permission.