Council tax benefit bombshell to hit society's poorest

Council tax bill Some of the poorest people will be paying council tax for the first time

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Another benefits bombshell could be on the way for some of the poorest in society.

Just as they adjust to the idea that their benefits will rise below inflation for the next three years, some now also face paying council tax for the first time.

The government is scrapping the national council tax benefit scheme from April.

Instead local authorities will have to draw up their own methods of supporting people on benefits and low incomes.

They will still get some funding from government but - and here's the catch - they'll only get 90% of what was needed to fund the support this year.

Poorest people

That leaves councils facing a dilemma on how to make up that shortfall.

The government has said councils cannot remove council tax benefit from pensioners, but it can look to ask people of working age to contribute.

That could leave councils turning to the poorest people to fill the gap.

Start Quote

Judith Wallace

The majority do feel that everyone should make some contribution”

End Quote Councillor Judith Wallace Deputy Mayor, North Tyneside

North Tyneside Council estimates it is £1.8m short of having enough money to fully fund existing council tax benefit claims.

It is therefore considering asking all working age council tax payers to contribute at least 20% of their tax bill.

That could mean a bill of at least £200 for people who have so far avoided the tax altogether.

The Conservative mayor and cabinet say the scheme would make sure that maintenance, child benefit and some disability payments were excluded when calculating people's incomes.

The poorest would also be offered weekly payment plans to help them budget.

Public support

But the council believes it is right to ask everyone - including people on limited means - to make a contribution.

It says a public consultation also showed support for the idea.

Councillor Judith Wallace, who is deputy mayor, said: "The alternative would be to take £1.8m out of services and we don't want to see those hit.

Council tax benefit claimants in a cafe Council tax benefit claimants like Denise, Philippa and Colin face a bill of at least £200

"And indeed the response of residents in North Tyneside indicated the majority do feel that everyone should make some contribution."

That's worrying some of the 12,500 people who'll have to pay up though.

Meadowell is one of the poorest parts of North Tyneside with high numbers of benefit claimants.

Single dad Colin Banks had to give up his job to look after his child.

He says he could not afford to pay £200 in council tax.

He added: "That's not just asking me to live on less than I'm physically able to live on, but asking my child to do the same."

Denise Downey is working, but only part-time for £500 per month, and under the scheme will be asked to pay a larger share of the tax.

She said: "To me it would be a struggle. It might have to be a choice between paying it and having enough money to feed myself and pay my gas and electricity.

Start Quote

Denise Downey

It might have to be a choice between paying it and having enough money to feed myself”

End Quote Denise Downey Council tax benefit claimant

"It's going to end up with a lot of people in arrears and being taken to court."

Higher bills

There is still time for a rethink as the plans still have to go to a full council meeting where Labour could vote them down.

But there are Labour local authorities also planning to ask the poorest to pay.

Newcastle and Sunderland are considering asking for at least an 8.5% contribution.

South Tyneside may look for a minimum 30% contribution from the non-disabled. That could lead to bills of £250 or more for those on benefits or low pay.

Some though believe they need to protect the people who currently claim council tax benefit.

Northumberland County Council is proposing that nobody misses out, as are Copeland and Eden with current protections retained.

And Durham County Council has just approved a similar scheme.

It is looking to plug the £5.5 million funding gap by abolishing some current council tax exemptions.

Empty homes Councils can now raise council tax on empty homes to help fill the funding gap

Second home owners will no longer get a 10% discount and owners of empty homes will be asked to pay full council tax for the first time. Indeed any homes left empty for more than two years will face a bill for 150% of the tax.

But the council admits it can only guarantee that protection for this year.

Deputy leader Alan Napier said: "If we had passed that shortfall on, the average working age family on council tax benefit would have been faced with an extra £250 to pay. That's money they just haven't got."

Government help

The government says it is offering councils help though, including the powers Durham has used to remove exemptions.

In addition, local authorities that decide to restrict the tax demand to 8.5% for the poorest claimants will get access to a £100m transitional fund.

Start Quote

Alan Napier

As a footballer I'd say this is a hospital pass from the government”

End Quote Councillor Alan Napier Deputy leader, Durham County Council

But that money is on offer for one year only, and it might not cover the full shortfall.

What local authorities will be praying for is economic revival.

Falling unemployment and rising salaries would lead to a fall in those needing council tax support.

But Durham County Council says even at a time where unemployment has fallen, it has seen 1,700 extra people claim council tax benefit.

Mr Napier added: "As a footballer I'd say this is a hospital pass from the government. They're cutting the amount of support while we're actually seeing the number of claimants go up."

And with the jobless total predicted to rise this year, the strain on councils could grow in 2013.

Many fear the government will also look to cut support again in future years.

So even the people who are protected this year, could find themselves paying council tax sooner or later.

Richard Moss Article written by Richard Moss Richard Moss Political editor, North East & Cumbria

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  • rate this

    Comment number 31.

    I agree with councils being able to tax homes that are standing empty, because we need as many homes as possible to be occupied.
    If council tax is levied on homes that up for sale, it may persuade vendors to sell at a more reasonable price, one that ordinary people can afford.

  • rate this

    Comment number 30.

    since i was made redundant my wifes earnings with take home of £700 per month is OUR INCOME. we pay £135 month council tax.
    we have not sought a rebate YET!!!
    but now they are going to put the charges up chances are i will put in for one. why should we pay YET MORE TO SUPPORT THOSE BETTER OFF THAN US. IF YOU CANT BEAT EM!!!!!

  • rate this

    Comment number 29.

    ASK, not MAKE.

    Means test this by way of income and expenditure calculations to ensure that only those ABLE to pay, DO pay. That is the only way this can be made fair otherwise, once again it is going to be the worst off who suffer.

  • rate this

    Comment number 28.

    I think this is stupid on what they are doing now bit late dont you think... as its only just being done i think it should be introduced slowly so that no person will end up on the street as their are afew already. im having to pay out of my own money for a roof out of my head as im on low income as it is.

  • rate this

    Comment number 27.

    The main reason for all these cuts and austerity measures is because Gordon Brown redistributed wealth away from this decade and into the last decade. Does anyone think that was a good idea now?

    I'm no fan of the cuts, but sorting out the debt crisis takes precedence. However, let's never forget that Labour's borrow and spend policy is really to blame for impoverishing the poor.

  • rate this

    Comment number 26.

    25. Anthony

    Or how about they are all as they say... what proof have you otherwise. You disgusting person.

  • rate this

    Comment number 25.

    I wonder how many of these are potential genuine hardship cases and how many are just leeching off the benefits system because that is what thay have always done, Needy or Greedy?

  • rate this

    Comment number 24.

    The main problem with this is that it does not just hit city and county council's but also hits parish and town councils which means higher percepts, which people are not happy with anyway with some places paying county councils for a service then a parish/town council or the same service as well double charging.

  • rate this

    Comment number 23.

    This cunning government took the heat off of them by getting this nation to hate and detest those who are unemployed,sick and disabled by labeling them scroungers and it worked At the same time they give millionares which the majority of cabinet members are a tax cut equal to £107,000 , looks like m.p.s. are going to get at 30% rise in their salary.In it all together, by stealing off the poor.

  • rate this

    Comment number 22.

    Whether redressing balance or whatever, the result can only be misery for some.
    There are no jobs. What are these folk to do? Die off?
    You can only tighten your belt so much. Then your legs fall off.

    Ah I get it. This measure is to boost the security businesses.
    Since more people will have to turn to crime. By necessity.

    It will be the only growth industry.
    That and loan sharking, poor food. . .

  • rate this

    Comment number 21.

    "Good point. It should be nearer 50%"

    Damn' rignt - I live alone, and use a lot less than 3/4 of what the Council Tax pays for than my neighbours either side, both of whom have families.

  • rate this

    Comment number 20.

    So we have Bedroom tax, 1% increase over the next few years in benefits and now council tax to be paid by the poorest in society. No matter how you examine the situation there are simply not enough jobs in the uk economy for full employment, made worse by the record levels of migrants in the uk at the moment. The poorest tend to spend all of their income, retail sales will take a hit this year.

  • rate this

    Comment number 19.

    I can't pay this nor the increase in rent due to under occupation of my house. I can't afford to move either. The council moved me into my present home 2 years ago because they wanted to knock my old house down and build a supermarket carpark, the housing shortage wasn't an issue then! I am being penalised for being made redundant from my job, now the Gov want to hound me out of my home too.

  • rate this

    Comment number 18.

    7: Why is the 25% discount for one person living not being looked at?

    Good point. It should be nearer 50%. This highlights the problem with Council tax. The council's cost has nothing to do with the value of a house - the number of people living in the county is a closer measure. When they tried that, there were riots and we got stuck with this unfair tax set in the 90's by "2nd gear surveys".

  • Comment number 17.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 16.

    2.Sane or not
    It would be far better to just abolish council tax and increase income tax by 2-3p in the £. Far less bureaucracy and far fairer.
    That would the LibDems local income tax.
    The council tax system is medieval, assuming wealth on the value of your house.
    If you introduced a system like that, to be fair there would have to be a maximum that an individual would pay.
    Gets my vote

  • rate this

    Comment number 15.

    Re: no.2 Sane or Not
    "It would be far better to just abolish council tax and increase income tax by 2-3p in the £. Far less bureaucracy and far fairer."

    Yes - ideal. Base it upon the ability to pay unlike some other taxes.

  • rate this

    Comment number 14.

    No doubt MP's will be able t continue claiming Council Tax as an expense, meanwhile some folks who currently can claim for Council Tax benefit will find that despite no major changes in their finances they will now have to pay a percentage of theie Council Tax. Yep we are in this together folks, only the depth varies. Seems MP's barely get their toes wet whilst other are almost drowning

  • rate this

    Comment number 13.

    It is fair that everyone contributes. No exceptions. The only difference is the rate at which we all contribute.

  • rate this

    Comment number 12.

    The government is hell bent of making the poor pay. But with what? All this will do is fill the jails with none payers. Mind you half the MPs want a 32% pay rise, so the money has to come from somewhere. Yes we if able contribute to the country but if we need the money so badly why have a tax break for the very rich?
    You can't get blood from a stone.


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