Option 2
Make changes to the existing scheme to deliver increased entitlement for those on the lowest household incomes
We have looked at increasing the maximum eligible Council Tax to 90% or 100% of Council Tax Band D for all working age households in Council Tax Bands A to E. Those in Council Tax Bands F, G or H will remain excluded from entitlement to Council Tax Support.
(a) Currently the maximum eligible council tax is either 80% or 90% of Council Tax Band D.
To provide maximum eligible council tax of 90% of Council Tax Band D for all working age households would result in the following changes.
| Proposed change | Number of households | Change in the annual amount of Council Tax Support |
|---|---|---|
| Retain minimum £5 and increasing maximum to 90% of Band D with no vulnerable category | 1,095 | £98,135 increase in annual Council Tax Support |
(b) The second choice looks at the effect of providing maximum eligible council tax of 100% of Council Tax Band D for all working age households would result in the following changes.
| Proposed change | Number of households | Change in the annual amount of Council Tax Support |
|---|---|---|
| Retain minimum £5 and increasing maximum to 100% of Band D no vulnerable category | 1,095 | £388,225 increase in annual Council Tax Support |
These increases are based on the current caseload and Council Tax Bands in 2024/25. Council Tax is likely to rise and so to keep the scheme within the current spend of £4.2m, we have looked at other changes we could make to deliver an increase to those households with the lowest incomes. Increasing the maximum eligible council tax would mean a vulnerable group is no longer needed or can be afforded.
(c) Increase non-dependant deductions to flat rates: £10 per week for those not in work and £20 for those in work.
When a claimant has other adults in the household, like grown up children, relatives or friends, the amount of help they can receive is reduced in respect of each person. The current maximum weekly deduction is £15.10, and this would be replaced with a £20.00 weekly deduction.
For someone out of work, the weekly deduction is £4.90, and this would change to £10.00.
For those already claiming Universal Credit, these deductions are £5.00 and £10.00 and would also increase to £10.00 and £20.00.
| Proposed change | Number of households | Change in the annual amount of Council Tax Support | Change in the annual amount of Council Tax Support -£29,133 |
|---|---|---|---|
| Universal Credit claim | 10 | 11 | £9,621 |
| Other income claim | 6 | 2 | £2,020 |
| Disabled | 5 | 17 | £17,492 |
(d) Remove the Additional Earnings Disregard from all working age claims
Under the current Council Tax Support scheme for working age claimant s not in receipt of Universal Credit, a further earnings disregard known as Additional Earnings Disregard of £17.10 per week can be applied which reduces the income used in the Council Tax Support calculation.
An Additional Earnings Disregard will be applied if members of the household work on average 16 or 30 hours per week, depending on their circumstances. However, modern work patterns such as zero-hour contracts and fixed-term contracts mean Additional Earnings Disregards frequently have to be added or removed, which affects Council Tax Support calculations. This means households can receive multiple revised council tax bills in a year, which makes it more challenging for people to manage their household budgets.
In 2023, we removed the Additional Earnings Disregard from those in receipt of Universal Credit. This would remove the Additional Earnings Disregard from all working age claims.
| Household group | Number of households affected | Change in the annual amount of Council Tax Support -£29,133 |
|---|---|---|
| Other income claim | 10 | £1,779 decrease in annual Council Tax Support |
| Disabled | 8 | £1,348 decrease in annual Council Tax Support |
(e) Set a capital limit of £6,000
Capital refers to the collective financial assets and resources that an individual possesses. It is more than just cash in hand or bank balances; it includes investments, property or land, stocks, bonds, shares etc. Some capital is disregarded, like the home you live in or personal injury trusts.
Currently, someone in the vulnerable group could hold £16,000 in capital and be able to claim Council Tax Support. All other working age households can hold up to £10,000 before they are not entitled.
The proposal is to set the capital limit at £6,000.
| Household group | Number of households affected | Change in the annual amount of Council Tax Support -£48,130 |
|---|---|---|
|
Universal Credit claim |
37 | £32,150 |
| Other income claim | 0 | £0.00 |
| Disabled | 21 | £17,680 |
The combination of these changes is presented in the table below:
| Proposed change | Number of households affected | Change in the annual amount of Council Tax Support |
|---|---|---|
|
Retain minimum £5 and increasing maximum to 90% of Band D with no Vulnerable category and other changes listed above:
|
999 customers would see no change 483 customers would see an increase in their entitlement 166 customers would see a fall in their entitlement 60 customers would lose their entitlement |
£21,343 increase in annual |
| Proposed change | Number of households affected | Change in the annual amount of Council Tax Support |
|---|---|---|
|
Retain minimum £5 and increasing maximum to 100% of Band D with no Vulnerable category and other changes listed above:
|
9 customers would see no change 1,450 customers would see an increase in their entitlement 113 customers would see a fall in their entitlement 136 customers would lose their entitlement |
£176,871 increase in annual |
Examples of effects of proposed changes
The case examples in this document are for illustration purposes only. They show the potential impact of the proposed scheme, in comparison to if the current scheme continues.
Case example 1
| Sue receives Universal Credit and is in Working Age Other Group. Living in Band C property. | |||
|---|---|---|---|
| Sue’s weekly Council Tax Support | Sue’s weekly Council Tax Support would change if the maximum was 90% of Band D | ||
| 80% | £9.97 weekly | 90% | £12.88 weekly |
| Annual Council Tax Support is £519.86 | Annual Council Tax Support wpuld be £672.64 | ||
A lone parent living in a Band C property with their family, have a weekly council tax liability of £29.06 in 2024/25. This is after the 25% single person discount is applied their weekly liability. A council tax discount of 25% is applied for being the only adult in the property.
If we increased the maximum entitlement to 90% their council tax Support would increase from £9.97 to £12.88 per week.
If we increased the maximum entitlement to 100% their council tax Support would increase from £9.97 to £15.78 per week.
Option 2
| Case example 2 | |
|---|---|
|
Leanne lives with two non dependents Tom and Amy in a Band E property. Her weekly Council Tax Support award is currently £26.62 per week, the current non-dependant deduction is £12.60 per week. Amy is receiving Employment Support Allowance (Income related), Employment Support Allowance (Support Group) and the Enhanced rate of Personal Independence payments. Amy is exempt from any non-dependent deduction. Tom earns £450 per week. Tom’s income means Leanne will have a £20.00 per week non-dependent deduction from her current CTS Award. On a 90% scheme her award would reduce be £19.22 per week. On a 100% scheme her award would reduce be £23.58 per week |
A single person living in a Band E property with two grown up children has a weekly council tax liability of £53.27 in 2024/25. Her current Council Tax Support entitlement is £26.62 per week.
If we increased the maximum and the non-dependant deductions her Council Tax Support would be £19.22 or £23.58 per week after increasing the maximum entitlement.
Option 2 case example 3
| Brian and Joan work and are in the working age other group. Living in Band D property. | |||
|---|---|---|---|
| Brian and Joan’s weekly Council Tax Support is currently | With the removal of the additional earning disregard Brian and Joan's entitlement would change to | ||
| £24.99 weekly |
£26.91 - weekly 90% scheme £30.28 - weekly 100% scheme |
||
| Annual Council Tax Support is £519.86 | Annual Council Tax Support wpuld be £672.64 | ||
A couple with one child, living in a Band D property, in receipt of Council Tax Support and one is in work. Their council tax liability is £43.58 per week in 2024/25.
They currently receive Council Tax Support of £24.99 per week, leaving £18.59 per week to pay.
They would get £26.91 after increasing the maximum to 90% and removing the additional earnings disregard.
This would be £30.29 if the maximum rose to 100% of Band D.
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