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Council tax benefit cuts: the expense of getting people with no money to pay up Council tax benefit cuts: the expense of getting people with no money to pay up
(7 months later)
Unlike the "bedroom tax", which only affects tenants of councils and housing associations, changes to council tax benefits from April will also affect owner-occupiers and private tenants. It is currently claimed by 5.9 million recipients and is the most widely claimed means-tested benefit. Local authorities have been asked by the government to replace council tax benefit with new local schemes that reduce the amount of council tax relief councils can pay out.Unlike the "bedroom tax", which only affects tenants of councils and housing associations, changes to council tax benefits from April will also affect owner-occupiers and private tenants. It is currently claimed by 5.9 million recipients and is the most widely claimed means-tested benefit. Local authorities have been asked by the government to replace council tax benefit with new local schemes that reduce the amount of council tax relief councils can pay out.
Some have opted to protect the 100% council tax benefit that poorer residents who live in property in a low council tax band currently receive. Instead they are reducing the amount of benefit for people living in higher council tax band properties. Other councils have chosen to spread the cuts equally, opting for a maximum 90% rebate for everyone. In this case, people on the minimum income possible to survive will from April have to use their meagre income to pay 10% of their total council tax.Some have opted to protect the 100% council tax benefit that poorer residents who live in property in a low council tax band currently receive. Instead they are reducing the amount of benefit for people living in higher council tax band properties. Other councils have chosen to spread the cuts equally, opting for a maximum 90% rebate for everyone. In this case, people on the minimum income possible to survive will from April have to use their meagre income to pay 10% of their total council tax.
As a housing benefit assessor at a local authority in the south-east who advises people on council tax benefits, I recently saw a single man in his 50s who had been claiming housing and council tax benefit for a few months after losing his job. He had received one of our letters sent out to people affected telling him that he would now have to pay 10% of this total bill – around £120 a year – not an easy thing to do for someone living on just £71 a week.As a housing benefit assessor at a local authority in the south-east who advises people on council tax benefits, I recently saw a single man in his 50s who had been claiming housing and council tax benefit for a few months after losing his job. He had received one of our letters sent out to people affected telling him that he would now have to pay 10% of this total bill – around £120 a year – not an easy thing to do for someone living on just £71 a week.
"I don't understand. I am on the minimum income anyway, how am I supposed to pay more? What can I do?" he asks me."I don't understand. I am on the minimum income anyway, how am I supposed to pay more? What can I do?" he asks me.
There's not a lot I can advise him so I reply slowly and clearly: "We know you're on minimum income. The government is changing the rules so that no one can get all their council tax paid for them. My advice would be try and pay what you can when your bill arrives. If you find you're struggling you can apply for extra help from the discretionary housing payment fund. Unfortunately this is a cash-limited fund so I can't guarantee we can pay you any extra."There's not a lot I can advise him so I reply slowly and clearly: "We know you're on minimum income. The government is changing the rules so that no one can get all their council tax paid for them. My advice would be try and pay what you can when your bill arrives. If you find you're struggling you can apply for extra help from the discretionary housing payment fund. Unfortunately this is a cash-limited fund so I can't guarantee we can pay you any extra."
But there is one group who will continue to receive full council tax benefit: pensioners. At a meeting to discuss the new rules, the news that pensioners will be exempt is greeted with weary resignation by some of my colleagues.But there is one group who will continue to receive full council tax benefit: pensioners. At a meeting to discuss the new rules, the news that pensioners will be exempt is greeted with weary resignation by some of my colleagues.
"Gotta look after the olds, haven't we? It's not like they've got enough already with their pensions and their houses they bought before property prices went mental and their bloody bus passes and free TV licences. When I'm their age that'll all be gone.""Gotta look after the olds, haven't we? It's not like they've got enough already with their pensions and their houses they bought before property prices went mental and their bloody bus passes and free TV licences. When I'm their age that'll all be gone."
As well as sparking this unseemly inter-generational outburst, what also comes out of the meeting is a creeping realisation that as a money-saving exercise, council tax reduction is totally counterproductive. People like the man I spoke to will simply not be able to pay and will rack up arrears and incur costs when they are summonsed to court.As well as sparking this unseemly inter-generational outburst, what also comes out of the meeting is a creeping realisation that as a money-saving exercise, council tax reduction is totally counterproductive. People like the man I spoke to will simply not be able to pay and will rack up arrears and incur costs when they are summonsed to court.
Our council tax colleagues are busy enough summonsing those not on full benefit as it is. The discretionary fund will not be able to cope and is already needed to plug gaps in people's housing benefit. If councils can afford it, many will hire new staff to collect the unpaid bills. This pushes up staff costs, which means savings have to be made elsewhere. Getting people with no money to pay up looks like it could be a time consuming, stressful and expensive business.Our council tax colleagues are busy enough summonsing those not on full benefit as it is. The discretionary fund will not be able to cope and is already needed to plug gaps in people's housing benefit. If councils can afford it, many will hire new staff to collect the unpaid bills. This pushes up staff costs, which means savings have to be made elsewhere. Getting people with no money to pay up looks like it could be a time consuming, stressful and expensive business.
In a further twist, instead of coming under the social security appeals process, appeals against council tax reduction decisions will be heard by the valuation agency, a body with no experience of dealing with means-tested benefits. In the case of people claiming housing benefit and council tax reduction, any appeals they might make would be heard by two separate bodies which could in theory arrive at two conflicting decisions on the same issue. One wonders whether Iain Duncan Smith had this situation in mind when he vowed to simplify the benefits system?In a further twist, instead of coming under the social security appeals process, appeals against council tax reduction decisions will be heard by the valuation agency, a body with no experience of dealing with means-tested benefits. In the case of people claiming housing benefit and council tax reduction, any appeals they might make would be heard by two separate bodies which could in theory arrive at two conflicting decisions on the same issue. One wonders whether Iain Duncan Smith had this situation in mind when he vowed to simplify the benefits system?
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