This in from the council, in their own words. Ed
Island households who receive local council tax support are being reminded to be aware of key changes due to start from April.
Working age claimants have already been sent postcards to help direct them to more information on the changes – and from this week council tax bills for 2016/2017 will be sent out.
The changes to local council tax support are being brought in due to a combination of factors, including: the government transferring responsibility for the scheme to local authorities from 2013, continuing major reductions in government grant funding towards the scheme, and the extreme financial challenges faced by the council.
Council leader, Councillor Jonathan Bacon, said:
“Due to the council’s dire financial position, we have been ‘forced’ into making changes to the Local Council Tax Support Scheme, which will affect many of the lowest income households on the Island.
“We have had no option to make changes that clearly would otherwise not have been our choice.”
Due to the council’s financial position, a funding cut of £632,000 to the Island’s Local Council Tax Support Scheme was approved by Full Council in January. For 2015/2016 the projected cost of the scheme was £11.527 million, with more than 13,200 claimants.
Councillor Bacon said:
“Despite the very reluctant decision to bring in these changes, and with funds drawn from other hugely under pressure areas of council spending, we have been able to establish an exceptional hardship fund of £370,000 to give vital targeted assistance to some of the claimants worst affected by the changes.”
The fund will offer short term assistance to those claimants that are considered to be in need of additional help, allowing them time to take active measures to review their circumstances.
Households are set to learn more of how the changes affect them when they receive their council tax bills for 2016/2017 over the coming weeks. The changes follow extensive public consultation between September and November 2015, to which there were 581 responses.
The main changes which will affect working age council tax support claimants are as follows:
- If you have savings/capital in excess of £6,000 you will no longer qualify.
- A self-employed claimant will be assessed to have a minimum living wage after a start-up period of one year if their declared income is less than this level.
- Backdating requests will be limited to one calendar month.
- The removal of the Family Premium from May 2016 in line with housing benefit changes.
- The removal of the blanket protection for certain claimants (maximum Local Council Tax Support limited to 80 per cent of council tax liability).
More information on the changes can be found at: www.iwight.com/revsandbens and www.iwight.com/lcts
Prior to April 2013 support for council taxpayers on low incomes was provided by a national council tax benefit scheme that was fully funded by the government. Under that scheme, claimants on very low incomes could get up to 100 per cent of their council tax paid – with the government paying a grant that meant there was no cost falling on the council.
The government, in transferring the responsibility to individual councils, initially cut the funding by ten per cent and subsequently through the revenue support grant funding for the council has massively reduced its support.
Councillor Bacon said:
“This has meant that the financial burden has increasingly fallen on local councils such as ours – and at the same time that other funding has been cut to such an extent that we face the very real prospect of not being able to set a legal budget for 2017/2018.”
In 2015/2016, up to 30 November 2015, there were 13,217 claimants under the Local Council Tax Support Scheme on the Island (including 6,294 pensioners, 3,341 described as working age (blanket protection), and 3,582 ‘other working age’).
Under the changes to the scheme it is projected that around 4,450 claimants will be affected, ranging from an average weekly reduction in local council tax support of £3.44 for the removal of the Family Premium, to a reduction of £14.50 a week for those affected by the change in the capital limit from £16,000 to £6,000. However, those affected may be able to apply for assistance under the exceptional hardship fund.
Councillor Bacon said:
“We sincerely hope the exceptional hardship fund will allow us to help those worst hit by these changes – and as people discover over the coming weeks how they will be individually affected by the changes, we would urge them to seek more information to see if they can benefit from this in any way.”
Image: Images of Money under CC BY 2.0
