Council Tax Rebate Consultation for Changes in 2015/16 Council Tax Rebate is changing Have your say! Consultation ends 23 May 2014 1
Why are we consulting? These changes could affect every resident in the district, not just those getting Council Tax Rebate. The changes could affect the services residents get for their Council Tax. We need to ask for people s views before we make any final decisions on changing our Council Tax Rebate scheme from 1 April 2015. Please take the time to read the information in this booklet and tell us what you think by 23 May 2014. The Government abolished Council Tax Benefit on 1 April 2013 and we replaced it with a local Council Tax Rebate scheme. Council Tax Benefit was previously fully funded by the Government and cost over 3.7m in 2012/13. For 2013/14, this funding was cut by 10% and we expect further cuts in funding from 2014/15 and future years. West Somerset Council has decided not to change the scheme for 2014/15. However, we wish to make sure that incentives to help people in work are designed to meet the requirement of West Somerset residents, so we are now consulting on options for 2015/16. West Somerset Council is keen to incentivise work and encourage people to remain in employment. We have prepared this document to explain our options for Council Tax Rebate from 1 April 2015 and to ask for your views. 2
Council Tax Rebate in West Somerset We are not allowed complete freedom on our Council Tax Rebate scheme. The Government stipulate we must fully protect pensioners under the same rules that applied to Council Tax Benefit. This means we have no discretion in the help we give people over pension age, as there are nationally set rules for this group. As pensioners make up 56% of those entitled to Council Tax Rebate in West Somerset, it means any cut in the help we can give falls on the remaining 44% of working age people. We must also consider the impact on vulnerable groups when we decide our Council Tax Rebate scheme. The Government have not defined which groups are vulnerable, but people with disabilities and those with responsibility for young children are likely to fall into this category. With less money to share out, we tried to design a Council Tax Rebate scheme that is as fair as possible to those people who are affected and to other Council Tax payers. West Somerset Council agreed a local Council Tax Rebate scheme that started on 1 April 2013. The scheme for working age people is based on the broad principles of the old Council Tax Benefit Scheme. The overriding aim of the scheme is to provide some financial support towards Council Tax bills for those on a low income, without placing too great a burden on our other Council Tax payers. Our scheme from 1 April 2013 is based on the following principles: It is means-tested, with most income taken into account and most outgoings not taken into account It provides support for those who work so they are better off than if they had relied on public funds It protects those of pension age 3
West Somerset Council feels it is important our local Council Tax Rebate scheme should: Be seen to be a fair and reasonable use of public funds Incentivise work by ensuring the scheme considers issues encountered by the West Somerset community. Be operationally efficient In agreeing our scheme from 1 April 2013 we decided to: Limit the maximum help we give to working age people through Council Tax Rebate to 85%. This means all working age people have to pay at least 15% towards their Council Tax bill. Significantly increase the amount of earned income we ignore when working out income for Council Tax Rebate. Increase non-dependant deductions. If a person getting Council Tax Rebate has a non-dependant living with them, we reduce the help we give them for their Council Tax. The amount we deduct depends on the income and circumstances of the non-dependant. Treat child maintenance as income when working out Council Tax Rebate. Previously we had ignored it when working out Council Tax Benefit. Abolish Second Adult Rebate. Before 1 April 2013 a person whose own income was too high to receive Council Tax Benefit was able to get a reduction on their Council Tax of up to 25% if they had other adult(s) on a low income in their household. Create a discretionary Additional Council Tax Rebate fund, to protect the most vulnerable. There is a limited pot of money available to provide short-term help to people who qualify for Council Tax Rebate but are still experiencing exceptional difficulties affording their Council Tax. 4
Consultation on options and proposals for change from 2015/16 West Somerset Council believes it is important the scheme aims to incentivise work and encourage people to remain in employment. Employees in West Somerset face various challenging issues, such as low pay, high transport costs etc. The Authority is keen to ensure that the Council Tax Rebate recognises these issues and safeguards recipients from above average debt, and the consequential hardship this would cause. We have come up with a proposal (proposal 3) to help achieve this. There are two ways of increasing entitlement to help working claims. They are increasing earnings disregards, and reducing tapers. These are explained in pages 8 to 11 of this document People of pension age will not be affected by these changes as they are protected under the same rules that previously applied to Council Tax Benefit. We are very interested in your thoughts on the options and proposals. Your views will help shape the local Council Tax Rebate scheme in West Somerset. The consultation runs from 24 February 2014 to 23 May 2014. The options and proposals for Council Tax Rebate from 1 April 2015 are explained in more detail on the following pages. 5
Proposal 1 Increase earnings disregards This is an amount of money that is deducted from the claimant or partner s earnings when we calculate entitlement to Council Tax Rebate. Our scheme currently allows the following earnings disregards: Single Person Couple Lone parent Disabled or long-term sick 10.00 per week 20.00 per week 37.50 per week 30.00 per week The highest disregard that applies is deducted once only from the total earnings of the claimant and partner. So if the claimant has more than one job, or if the claimant and partner both work, the disregard is made to the combined earnings. Example of single claimant in work: Weekly Gross pay 130.00 Income tax - 12.50 National Insurance - 7.50 Net pay 110.00 Earnings disregard - 10.00 Earnings used to calculate CTR 100.00 Increasing earnings disregards will reduce the amount of the claimant s income that we take into consideration and therefore increase entitlement. 6
For example, if we double the disregard only 90 of the claimant s 110 take home pay is taken into account Weekly Gross pay 130.00 Income tax - 12.50 National Insurance - 7.50 Net pay 110.00 Earnings disregard - 20.00 Earnings used to calculate CTR 90.00 Question 1. Do you agree with Proposal 1 to increase earnings disregards? Strongly agree Agree Disagree Strongly Disagree 7
Proposal 2 Reducing tapers Entitlement to Council Tax Rebate is assessed by comparing a claimant s actual income to the money they are allowed to cover their living expenses (called their applicable amount ). If their income is less than their applicable amount they qualify for maximum eligible rebate. For working age claims this is 85% of their council tax liability less any non dependant deductions. For pension age claims it is 100% of their council tax liability less any non dependant deductions. If the claimant s income is more than their applicable amount, the difference is called excess income. The claimant qualifies for maximum eligible rebate (detailed above) less a percentage of their excess income. The percentage is called the taper. It is currently set at 20% for all claims. If we follow on from the previous example, a taper would work as follows: Weekly Council tax liability 20.00 Single person discount 5.00 Net weekly council tax liability 15.00 Total weekly assessable income 100.00 Applicable amount 71.70 Excess income 28.30 Taper (20% of 28.30) 5.66 Weekly CTR entitlement 9.34 Reducing the taper will lessen the rate at which benefit is reduced if their actual income exceeds their applicable amount (the amount allocated for the basic living needs for the claimant and their family). 8
If we were to use a 10% taper, entitlement would increase to 12.17 per week Weekly Council tax liability 20.00 Single person discount 5.00 Net weekly council tax liability 15.00 Total weekly assessable income 100.00 Applicable amount 71.70 Excess income 28.30 Taper (10% of 28.30) 2.83 Weekly CTR entitlement 12.17 Question 2. Do you agree with Proposal 2 to decrease tapers? Strongly agree Agree Disagree Strongly Disagree 9
Proposal 3 - Increase earnings disregard to 50 for all and reduce the taper to 7.5% The amount of earnings ignored when calculating entitlement to Council Tax Rebate will increase as follows: Current Disregard Proposed Disregard Single Person 10.00 50.00 Couple 20.00 50.00 Lone parent 37.30 50.00 Carers, disabled or long term sick 30.00 50.00 In addition to this, the taper (the rate at which Council Tax Rebate is reduced) will decrease from 20% of the excess income to 7.5% if the customer or their partner are working Question 3. Do you agree with Proposal 3 to change the income disregards and tapers from the current scheme? Strongly agree Agree Disagree Strongly Disagree 10
Other changes to Council Tax Rebate Question 4 Are there other people we should protect when considering changes to our Council Tax Rebate scheme from April 2015? If so, please tell us who and give your reasons. Question 5 Are there any other ways of encouraging people into work that could be applied as part of the Council Tax Rebate scheme from 1 April 2015? 11
Question 6 Do you have any other comments or suggestions for the Council Tax Rebate scheme? If so, please state these and give reasons Data Protection: We confirm any data we receive in response to this survey will be processed in accordance with the Data Protection Act 1998. About you Are you a resident of West Somerset? Yes No Do you pay Council Tax? Yes No Do you currently receive Council Tax Rebate or Housing Benefit? Yes No Please tick the description that best reflects your circumstances: You are working full / part time A lone parent You have a disability or ill health You have informal / formal caring responsibilities You look after home / family 12
Are you responding to this consultation as: A resident A housing association / registered provider A carer / advocate A partner organisation to the Council A representative of a voluntary organisation Equalities Monitoring The answers you give to these questions help us improve services and ensure we reach a wide range of people with different backgrounds and experience. The questions are not compulsory and won t be used to identify individuals. Answer as many questions as you feel comfortable with. What is your gender? Male Female Transgender Prefer not to say What is your age group? Under 17 18-24 25-34 35-44 45-54 55-64 65-74 75+ Prefer not to say Do you consider yourself as having a disability or long-term physical or mental health condition? Yes No Prefer not to say Do you consider yourself to have a religion or belief? Belief Religion None Prefer not to say 13
What do you consider your sexual orientation to be? Heterosexual Bisexual Gay man Lesbian Prefer not to say Which of these ethnic groups do you feel you belong to? White or White British White White Irish Other White Background Black or Black British African Caribbean Other Black Background Mixed Multiple Ethnic Group White and Black Caribbean White and Black African Other mixed background Asian or Asian British Indian Bangladeshi Chinese Pakistani Nepalese Any other Asian background Other ethic groups Arab Other ethnic group Prefer not to say Thank you for taking the time to fill out this questionnaire. 14
Please return completed questionnaires to: West Somerset House, Killick Way, Williton, TA4 4QA or The Customer Centre, 1-3 Summerland Road, Minehead, TA24 5BP If you prefer, you can complete a form online at www.westsomersetsays.co.uk The closing date for the consultation is 23 May 2014 We will publish our findings on our website at www.westsomersetonline.gov.uk/benefits west some etonli ne.gov.uk/ nefits after the consultation closes 15
If you have any queries about the consultation, you can contact us by Telephone: 01643 703704 Email: benefits@westsomerset.gov.uk Write: West Somerset House, Killick Way, Williton TA4 4QA 16