Agenda item

Council Tax Reduction Scheme 2017/18


Councillor Nick Emmerson, Vice Chair of the Housing Economy and Business Committee formally moved the draft resolution.




That the revision of the existing Council Tax Reduction Scheme (CTRS), as indicated in paragraphs 2.1.1 – 2.1.16 of the report and below, be agreed with effect from 1 April 2017, and that this be recommended to Full Council on 30 January 2017:


  1. That entitlements to reductions shall be calculated on the net income of the claimant (and partner), less any income ignored (disregarded) for the purpose of calculating an entitlement, which awards a percentage reduction in the council tax based on £50 bands
    of weekly income (Appendix A).


Income Revisions


2.            That the non-dependent deductions for those 18 or over be revised to three flat rate levels as follows:


? £5 per week - non worker
? £10 per week- Gross wages of £22,999 or less
? £30 per week - Gross wages of £23,000 or above

A deduction is an amount taken off a claimant’s entitlement to a council tax reduction on the basis that it is expected that non-dependants will contribute to housing costs.


3.            That tariff income shall no longer apply to claimants with savings between £6,000 and £10,000. Under the existing CTRS tariff income is applied as follows; £1 for every £250 of savings above £6,000.


4.            That working claimants and/or their partner who have additional needs due to disability (defined as being in receipt of a relevant disability benefit) will have an earned weekly income disregard of £50.


5.            That care leavers (someone who has been in the care of a local authority for a period of 13 weeks or more (prior to their 16th birthday)) will receive a higher earned weekly income disregard of £50 until their 25th birthday. Non-working care leavers will continue
to receive 100% Council Tax Reduction (CTR) until their 25th birthday.


6.            That child maintenance, paid by one partner to the other for their child[ren], shall be treated as income; but the first £50 per child per week shall be ignored (disregarded).


7.            That all self-employed income, including that from child-minding, shall be calculated using the “minimum income floor”. The Minimum Income Floor (MIF) is an assumed level of earnings for a self-employed claimant and/or their partner that matches their work expectations, for example the expected hours (35 hours for a couple and 16 hours for lone parents). The MIF is calculated by multiplying the number of expected hours by the National Minimum Wage (or equivalent national scheme) for the claimant's or their partner’s age group and deducting the relevant income tax and national insurance, the income for a CTR is calculated based on this net figure. If the claimant's or their partner’s actual earnings are above the MIF, the CTR is calculated based on those earnings. The MIF will not be applied to the newly self-employed claimants for a maximum period of 12 months. If both claimant and partner are self employed, their total self employed income is calculated as a whole, MIF would be applied if their total self employed earnings were lower than this figure.


8.            That any claimant and/or partner with an income above £450 a week (after deducting income tax and national insurance) and after applying the earned income disregard will no longer be entitled to claim a CTR.


9.            The income types to be included or ignored (disregarded) when calculating a CTR are set out in Appendix B. This includes all of the recommended revisions to the CTRS above.

Applicable Amounts and Premiums


10.         hat ‘applicable amounts’ will no longer be used in the calculation of a CTR. An “applicable amount” is a standard national figure which the Government believes reflects the basic living needs of a claimant and his or her family. Applicable amounts vary dependent on the circumstances of the claimant.


11.         That ‘premiums’ will no longer be used in the calculation of a CTR. Premiums are generally awarded to help towards the costs of a disability where an individual receives a qualifying benefit, such as Attendance Allowance. The premium is currently added to a claimant’s applicable amount, which increases the amount of income disregarded in calculating entitlement to CTR.

Other changes


12.         That all claim types (of working age) shall be calculated using a maximum property banding of Band D.


13.         That households with dependent children under the age of two will no longer have their entitlement calculated using the previous national scheme rules of council tax benefit. Their entitlement to a CTR will be assessed in the same way as households with children aged 2 to 18.


14.         That all claimants, or their partners residing with them, who appear to the Authority to be entitled to claim a relevant social security benefit administered by the Department for Work and Pensions (DWP) or HMRC, such as Universal Credit, Job Seekers Allowance,
Tax Credits and Employment Support Allowance, and who deliberately fail to claim that benefit(s), for the purpose of reducing their income and with the intention of increasing any entitlement to CTR shall not be entitled to claim a CTR. The purpose of this is to
ensure claimants maximise their income by applying for any relevant social security benefits.


15.         That the “Temporary Absence rules” under the CTRS shall be aligned with the Temporary Absence rules applicable to Universal Credit. The maximum period of temporary absence under the CTRS will however be set at one calendar month (extended to 6 months where the claimant, their partner or their child is receiving
medically approved care, or 2 months in the case of the loss of a family member).


16.         That the Authority’s Hardship Fund provision shall be increased to £50,000 to help any customers who experience significant hardship caused by reductions in entitlements as a consequence of the revisions to the CTRS.


Supporting documents: