COUNCIL TAX BENEFIT IS BEING ABOLISHED – AND 90% OF PEOPLE STILL DO NOT KNOW.
BENEFIT CLAIMANTS WILL HAVE TO APPLY FOR LOCAL REDUCTIONS – IF THEY EXIST IN YOUR AREA
Council tax has undergone major changes, the biggest since the tax was created in 1992. Council tax benefit is being abolished but 90% of the population do not realise this.
After 1 April 2013 low income council taxpayers will no longer be entitled to 100% benefit to cover their council tax bill. Council tax benefit has operated for 20 years, and was a cornerstone on which the council tax system was established after the collapse of the community charge or poll tax which failed between 1990-93, after 12-15 million people did not pay it. (1)
After April 1st 2013 there will be no more council tax benefit and many people, including all adults on benefits will be required to pay at least part of the local tax bill on their home. For example, in Ealing some 33 000 people currently receiving full council tax benefit will lose it after 1st April 2013.
The only exceptions will be pensioners who will continue to get full support, and full-time students and the severely mentally impaired who are exempt from council tax.
Instead of council tax benefit under the Local Government Act 2011 and the Local Government Finance Act 2012, councils have to bring in in a system generally known as ‘local support’ to reduce the bills of those on low incomes.
Instead of national Government setting the council tax benefit level, each council now sets its own local level of support which it has to pay. Each council should have decided by 31st January 2013 who will be getting some help and who will not. There will be winners and losers – mostly losers amongst the unemployed and those on benefits.
Each local scheme will be different, effectively 326 different schemes for 326 different councils in England. Council tax benefit will remain in place in Scotland and Wales.
If you are one of the people affected by this change here is what you need to know
WHO WILL QUALIFY FOR LOCAL SUPPORT?
Not all people will qualify for local support. You will need to find out as soon as possible. You need to contact your local council to discover if you do – most people currently on benefits will be expected to pay at least a percentage of council tax each month.
Some councils such as Kensington and Chelsea and Tower Hamlets are absorbing the abolition of council tax benefit and so those previously getting 100% benefit will be protected for at least this year.
For people living in other boroughs and also being hit by the welfare benefit cap, housing benefit cuts and rises in the cost of fuel and food, it will be impossible to meet the council tax demands going out and debts will be created.
You should contact your local revenues and benefits section of your council for information.
HOW TO SUPPLY FOR SUPPORT
Under the Council Tax Reduction Schemes (Prescribed Requirements) Regulations 2012 (2) there are two possible types of reduction available (1) reductions under the local support scheme and (2) discretionary reductions which an council may give to individuals in hardship.
An application for a reduction under the local support scheme may be made to the Council —
(a) in writing,
(b) by means of an electronic communication in accordance with Part 4 of this Schedule, or
(c) where an authority has published a telephone number for the purpose of receiving such
applications, by telephone.
APPLICATIONS IN WRITING MUST BE ON STANDARD FORMS
If you currently receive council tax benefit you should contact your local council’s revenues and benefits section as soon as possible to find about the reduction scheme and obtain an Application Form.
The regulations state an application which is made in writing must be made to the offices of the authority on a properly completed form. This form must be provided free of charge by the authority for the purpose. If the council refuses to send you an application form, you should lodge a formal complaint at once.
Once a council has received a completed application for local support it should decide on your application within 14 days or as soon as reasonably practical.
Discretionary reductions [i.e. no automatic entitlement] are also possible but each Council will treat this differently. Many may be rejected but a local authority must act reasonably in determining whether to grant a person either of them. By law it cannot have an automatic policy of rejecting certain classes of application without consideration of the facts.
HOW MANY APPLICATIONS FOR A REDUCTION CAN BE MADE?
There is no limit on the number of applications that a household can make for local support.
Multiple applications may need to be made over the course of a year when circumstances change. For example, if your financial circumstances worsen in the year, if you suffer illness or an accident or if your home suffers a fire or a flood you may apply again. Council taxpayers are also expected to inform the council of any change in circumstances. Any change of circumstances must be reported as with council tax benefit.
If a you do not qualify for a reduction under the local support scheme, you can still apply for a discretionary reduction. Your council must act reasonably when exercising its discretion and not simply dismiss an application without good reason.(3)
IS THERE A RIGHT OF APPEAL AGAINST A REFUSAL TO AWARD A REDUCTION ?
There is a right of appeal against a decision to refuse local support. This appeal goes to the Valuation Tribunal England, the administrative offices of which are based at Whitechapel in London and Doncaster.(4)
HOW DOES THE GOVERNMENT EXPECT PEOPLE WHO DO NOT GET SUPPORT TO PAY?
That is a question for Parliament. Nobody knows. No-one in Government has yet answered this question. The problem was raised in the House of Lords by peers on behalf of the Local Government Association and former Conservative Ministers who remembered the mistakes made with the poll tax. Looking at the current levels of benefits it will clearly be impossible for many people to pay extra sums demanded for council tax. Even if people begin saving now, there will be many who will simply be unable to afford to pay. Lawyers know it isn’t worth suing a person who has no money and debt collectors know you can’t make a person who has no money pay. In short, it looks like the Government is setting up a non-payment campaign by default, as many unpaid bills will not be worth pursuing as costs will exceed the amount of tax involved and not be recovered either. The costs of non-payment in 2013 arising from those unable to pay will be added on to the bills of those do pay in 2014.
TO BE CONTINUED….
(1) The system of 100% benefit was introduced under the Local Government Finance Act 1992 to ensure council tax worked. Regrettably, the same error under community charge is being repeated.
(2) Council Tax Reduction Schemes (Prescribed Requirements) Regulations 20122012 SI no. 2885 which came into force November 27th 2012.
(3) See Gargett v Lambeth Borough Council  Court of Appeal December 20th 2008; Associated Provincial Picture Houses v Wednesbury Corporation  1 KB 223.
For London and the central office The Valuation Tribunal England, 2nd Floor Black Lion House, 45 Whitechapel Road London E1 1DU
An appeal is made in writing under section 16 of the Local Government Finance Act 1992 against “any calculation” by a local authority over a sum in council tax. The best argument will be that the Council has acted unreasonably in refusing benefit given the circumstances of the taxpayer.