Local Council Tax and Council Tax Support scheme consultation

Local Council Tax and Council Tax Support scheme consultation Give us your views by 30 September 2018 Blaby District Council 1

Contents Page Why are we consulting? 3 What changes to the council tax liability are we considering? 5 How does our council tax support scheme work now? 6 Options for change to the council tax support scheme 7 How you can give us your views 10 Who will be affected by the options for change? 11 What this consultation does not cover 11 How will this affect different households? 11 How customers may be affected by these changes 12 Examples of maximum amounts of Council Tax Support 17 Your views and suggestions are important to us 18 Notes 19 What happens next? 20 2

Why are we consulting? In 2013, the way we helped people to pay council tax changed. Before then, we ran a scheme called Council Tax Benefit. This was a nationwide scheme, which helped people on low income by paying some or all of their council tax bills. The full cost of this benefit was met by the government. In April 2013, the national scheme ended, and councils had to introduce local schemes, known as Council Tax Support schemes (CTR) or Council Tax Support schemes (CTS). Government funding was cut, and all working age people were required to pay at least 8.5% of their council tax bill in 2013/14 increasing to 15% from 2014/15 onwards. In other respects, the new scheme is similar to the old one. The money we get from the government is no longer based on the amount of Council Tax Support we award. It is just part of the funding we get for all our services. This funding has seen significant reductions in recent years. Since we last consulted on our CTR Scheme our members have taken difficult decisions regarding our service provision, including the introduction of an alternate weekly refuse and recycling service. This, along with anticipated growth in business rates, has helped to close our budget gap. However, proposed changes to government grant funding for local authorities mean that there are still difficult choices to be made. 3

Why are we consulting? (continued) Around 91% of the income collected is passed to Leicestershire County Council, Leicestershire Fire Authority, Leicestershire Police and local parish councils. The County Council alone need to make savings of 68m by2020/21. Changes to the Council Tax Support scheme will contribute to those savings and reduce the need to make savings in areas such adult and children s social care, highways maintenance, public bus services, police and fire services. In this climate, we believe we should consider options to change our Council Tax Support scheme by reducing the amount of support we offer. People of state pension credit age were not affected by the changes in 2013, and would not be affected by the options we are now considering. Changes to the Council Tax liability scheme could also contribute to reducing costs to the council which is why we are looking at changes to some of our charges, discounts and exemptions. No decision has yet been made, and it is therefore important that you give us your views in this consultation. The consultation is open until 30 September, 2018. 4

What changes to the council tax liability are we considering? UNOCCUPIED PROPERTIES We are considering changes to the charges we are making in respect of unoccupied properties. Currently if a property is unoccupied and substantially unfurnished we allow a 1 month period free of Council Tax charge (from the date of last occupation). We propose to remove this discretion. LONG TERM EMPTY PROPERTIES We are considering applying a 200% Council Tax charge to properties that have remained empty and unfurnished for a period exceeding 2 years. This is to create an incentive for owners to bring long term empty properties back into use. SECOND HOMES The third change under consideration is to remove the 10% discount that we currently apply to second homes within Blaby District. A second home is not someone s main residence. PROPERTIES UNDERGOING MAJOR REPAIR WORKS OR STRUCTURAL ALTERATION For this type of property we presently award a discount of 50% for up to 12 months. We are considering the removal of this discount for this type of property. The combination of all of the above changes could generate more income for the Council,Leicestershire County Council, Leicestershire Fire Authority, Leicestershire Police and local parish councils amounting up to 400,000 per year which could be used to improve or maintain services for the residents of Blaby District Council. 5

How does our Council Tax Support scheme work now? Council Tax Support (CTS) is a means-tested discount to Council Tax bills. We consider each claimant s income and needs, as well as who lives in the household. Claimants who are assessed as needing support receive a reduced Council Tax bill. If you are a claimant of working age, the following rules apply to your claim: You will have to pay at least 15% towards your council tax bill If your income (and your partner s, if you have one) is higher than your calculated needs, your reduction will be reduced by 25p for every 1 that you earn above your needs allowance Second adult rebate does not apply for working age residents. 6

Options for change to the Council Tax Support scheme We are consulting on the following options: Option 1: Make no change at all to the current scheme. This may mean that cuts may have to be made in other services such as refuse, the face to face service and charges for services. Option 2: Reduce the maximum support to 83%, meaning customers would have to pay at least 17% towards their council tax bill. This would reduce spending by approximately 102,000 per year which includes extra funding to the county council, police and fire authorities. Option 3: Reduce the maximum support to 80%, meaning customers would have to pay at least 20% towards their council tax bill. This would reduce spending by approximately 203,000 per year which includes extra funding to the county council, police and fire authorities. Option 4: Reduce the maximum support to 78%, meaning customers would have to pay at least 22% towards their council tax bill. This would reduce spending by approximately 303,000 per year which includes extra funding to the county council, police and fire authorities. Other potential changes to the scheme under consideration are as follows: A. To treat a self employed person as being in receipt of the minimum wage for their age after at least 12 months of trading. Currently, if they tell us that they have made no profit, we treat them as having nil earnings. This change would be in line with the government s treatment of self employed earnings for Universal Credit. 7

Options for change to the Council Tax Support scheme (continued) B. Aligning our Council Tax Support scheme to current Housing Benefit regulations in respect of the changes made since 2013. There have been several changes to the Housing Benefits scheme and the following is a summary of changes that we think should be considered when amending our Council Tax Support (CTS) scheme: 1. Removal of the family premium of 17.45. The family premium would not be included in the CTS applicable amount for new entitlements to CTS beginning on or after 1 April 2019, or for any existing claimants who have a child or become responsible for a child (under 16), or young person (under 20), for the first time after 1 April 2019. This means that less CTS would be paid. 2. Temporary absence outside of Great Britain to be reduced from 13 weeks to 4 weeks effective from 1 April 2019 before CTS is affected. This means that for absences greater than four weeks that fall under this rule no Council Tax Support would be payable. 3. From 1 April 2019 the maximum period for which CTS claims may be backdated for working age claimants would be reduced from 6 months to 1 month in line with Housing Benefit rules. This means that CTS would not be paid further back than 1 month from the date that the claim is made 4. Nationals of the European Economic Area countries would no longer be able to claim CTS from 1 April 2019 if they do not retain a worker status. This means that people from the EEA cannot claim CTS if the are not considered to be working or have a genuine prospect of work. 8

Options for change to the Council Tax Support scheme (continued) 5. The following income and capital would be ignored for the purposes of assessing CTS from 1 April 2019: Any payments made from the Infected Blood Schemes for England, Wales and Northern Ireland ( this includes the following schemes: The Eileen Trust, The MacFarlane Trust, MFET Ltd, the Skipton Fund and the Caxton Foundation). Payments made from the London Emergencies Trust. Payments made from the We Love Manchester Emergency fund. Payments made to children with special educational needs under the Education, Health and Care (EHC) plan. 6. If a claimant decides to access their contribution pension fund anything they draw from their pension would be treated as income or capital for the purposes of their CTS claim. This means that they would receive less CTS than they do now. 9

How you can give us your views Once you have completed the survey you will have the opportunity to comment on the various options that we are considering in respect of changes to the Council Tax liability and Council Tax Support scheme and you will also be able to offer different suggestions on how we can reduce our spending. We will take these views and suggestions into consideration when we look at amending our scheme from 1 April 2019 once the consultation is complete. 10

Who will be affected by the options for change? Every working age resident of Blaby who currently gets a Council Tax Support would be affected by changes to the cap or maximum level (options 2, 3, 4). They may also be affected by the changes outlined in A or B. The council operates a separate discretionary fund to help vulnerable taxpayers who would suffer hardship if they had to pay their full Council Tax bill (after it has been reduced). People need to apply separately for this assistance, which is based on individual circumstances. What this consultation does not cover There will be no change to the amount of help available to people of pension credit age. The 25% single person s discount and the exemption for people who are severely mentally impaired and live on their own will not change. How will this affect different households? We can t yet say how these proposed options would affect individual claimants. We have prepared some examples that illustrate how different households might be affected. These do not necessarily show how you would be affected, even if your circumstances match one of the examples. 11

EXAMPLE 1 single person on Job Seeker s Allowance (JSA) living in a band B property receiving 25% single person discount (SPD) Annual bill after SPD applied 1040.17 1040.17 1040.17 1040.17 The council pays ( 884.14) ( 863.34) ( 832.14) ( 811.33) You pay/year 156.03 176.83 208.03 228.84 You pay / monthly (for ten months)* 15.60 17.68 20.80 22.88 Weekly cost of council tax** 2.98 3.38 3.98 4.76 EXAMPLE 2 lone parent on income support one child under 5 years of age living in a band A property receiving 25% single person discount (SPD) Annual bill after SPD applied 891.56 891.56 891.56 891.56 The council pays ( 757.83) ( 739.99) ( 713.25) ( 695.42) You pay/year 133.73 151.57 178.31 196.14 You pay / monthly (for ten months)* 13.37 17.68 17.83 19.61 Weekly cost of council tax** 2.56 2.90 3.41 3.75 * Council tax payers can choose to spread their bill over a 12 month period if they wish; provided this arrangement is set up by April. ** This weekly cost is for reference only. Council tax cannot be paid weekly. 12

EXAMPLE 3 lone parent on income support four children under 10 years of age living in a band C property receiving 25% single person discount (SPD) Annual bill after SPD applied 1188.76 1188.76 1188.76 1188.76 The council pays ( 1010.44) ( 986.67) ( 951.01) ( 927.23) You pay/year 178.31 202.09 237.75 261.52 You pay / monthly (for ten months)* 17.83 20.21 23.76 26.15 Weekly cost of council tax** 3.42 3.88 4.57 5.03 EXAMPLE 4 family, claimant working 16 hours receiving tax credits three children under 10 years of age living in band D property) Annual bill 1783.14 1783.14 1783.14 1783.14 The council pays ( 1278.68) ( 1243.02) ( 1189.52) ( 1153.86) You pay/year 504.46 540.12 593.62 629.28 You pay / monthly (for ten months)* 50.45 54.01 59.36 62.92 Weekly cost of council tax** 9.70 10.38 11.41 12.10 * Council tax payers can choose to spread their bill over a 12 month period if they wish; provided this arrangement is set up by April. ** This weekly cost is for reference only. Council tax cannot be paid weekly. 13

EXAMPLE 5 family claimant working 30 hours and receiving tax credits three children under 10 years of age living in a band E property) Annual bill 2179.40 2179.40 2179.40 2179.40 The council pays ( 296.03) ( 252.44) ( 187.06) ( 143.47) You pay/year 1883.37 1926.96 1992.34 2035.93 You pay / monthly (for ten months)* 188.33 192.69 199.23 203.59 Weekly cost of council tax** 36.22 37.06 38.31 39.15 EXAMPLE 6 couple claimant working 16 hours three non-dependant adults - minimum deductions for each living in a band A property Annual bill after SPD applied 1188.75 1188.75 1188.75 1188.75 The council pays ( 801.47) ( 777.70) ( 742.04) ( 718.26) You pay/year 387.28 411.05 446.71 470.49 You pay / monthly (for ten months)* 38.72 41.10 44.67 47.05 Weekly cost of council tax** 7.45 7.90 8.59 9.05 * Council tax payers can choose to spread their bill over a 12 month period if they wish; provided this arrangement is set up by April. ** This weekly cost is for reference only. Council tax cannot be paid weekly. 14

EXAMPLE 7 couple aged over 25 years self employed for more than twelve months only declaring earnings 94.00 per week minimum floor income of 7.83 per hour 30 hours per week used in assessment from April 2019 living in a band C property Current scheme Annual bill 1585.01 1585.01 1585.01 1585.01 1585.01 The council pays ( 1333.96) ( 122.30) ( 90.91) ( 43.82) ( 12.44) You pay/year ( 235.41) 1447.07 1478.46 1525.54 1556.93 You pay / monthly (for ten months)* 23.54 144.71 147.84 152.55 155.69 Weekly cost of council tax** 4.53 27.83 28.43 29.34 29.94 EXAMPLE 8 lone parent Two children under 10 years of age in receipt of tax credits self employed more than 12 months declaring income of 75.00 per week minimum floor income of 7.83 per hour 30 hours per week used in assessment from April 2019 living in band E property Current scheme Annual bill 1634.55 1634.55 1634.55 1634.55 1634.55 The council pays ( 1389.37) ( 165.44) ( 132.75) ( 83.77) ( 51.03) You pay/year 245.18 1469.11 1501.80 1525.54 1556.93 You pay / monthly (for ten months)* 24.52 14.69 15.02 15.51 15.83 Weekly cost of council tax** 4.71 28.25 28.88 29.82 30.45 * Council tax payers can choose to spread their bill over a 12 month period if they wish; provided this arrangement is set up by April. ** This weekly cost is for reference only. Council tax cannot be paid weekly. 15

EXAMPLE 9 couple aged over 25 years In receipt of Universal Credit with earnings of 134.40 per week two children under 10 years of age Living in band C property Annual bill 1,585.01 1,585.01 1,585.01 1,585.01 The council pays ( 1347.26) ( 1315.56) ( 1268.01) ( 1236.31) You pay/year 237.75 269.45 317.00 348.70 You pay / monthly (for ten months)* 23.77 26.94 31.70 34.87 Weekly cost of council tax** 4.57 5.18 6.10 6.70 EXAMPLE 10 single person receiving Personal Independence Payment in receipt of Universal Credit 271.80 per month working 19 hrs earning 604.95 net per month living in Band C property with disabled band reduction and 25% single person discount (SPD) Annual bill after SPD applied 1040.17 1040.17 1040.17 1040.17 The council pays 647.15 626.35 595.14 574.34 You pay/year 393.02 413.82 445.03 465.83 You pay / monthly (for ten months)* 39.30 41.38 44.50 46.58 Weekly cost of council tax** 7.55 7.95 8.56 8.95 * Council tax payers can choose to spread their bill over a 12 month period if they wish; provided this arrangement is set up by April. ** This weekly cost is for reference only. Council tax cannot be paid weekly. 16

Examples of maximum amount of Council Tax Support based on bandings 2018-2019 maximum support 85% maximum support 83% maximum support 80% maximum support 78% band total charge maximum CTS amount payable maximum CTS amount payable maximum CTS amount payable maximum CTS amount payable A 1,188.75 1,010.44 178.31 986.66 202.09 951.00 237.75 927.22 261.25 B 1,386.89 1,178.86 208.03 1,151.12 235.77 1,109.51 277.38 1,081.77 305.12 C 1,585.01 1,347.26 237.75 1,315.56 269.45 1,268.01 317.00 1,236.31 348.70 D 1,783.14 1,515.67 267.47 1,480.01 303.13 1,426.51 356.63 1,380.85 402.29 E 2,179.40 1,852.49 326.91 1,808.90 370.50 1,743.52 435.88 1,699.93 479.47 F 2,575.65 2,189.30 386.35 2,137.79 437.86 2,060.52 515.13 2,009.01 566.64 G 2,971.89 2,526.11 445.78 2,466.67 505.22 2,377.51 594.38 2,318.07 653.82 H 3,566.28 3,031.34 534.94 2,960.01 606.27 2,853.02 713.26 2,781.70 784.58 Special notes (please read these notes and refer to leaflet for more detail) All of the above figures are based on the Braunstone parish April 2018 Council Tax liabilities and are subject to change The examples above show the maximum CTS a claimant can receive but exactly how much will depend on income, savings and who is in your household 17

Your views and suggestions are important to us This consultation is open until 30 September 2018. Final decisions have not been made about the new CTS scheme yet, your views and ideas will help to make that decision. You can give your views on the options online by visiting www.blaby,gov.uk/consultation If you need to complete a paper form you can download a copy from the council website as shown above or ring 0116 2727510 to request a copy of the paper form and response form. Paper forms should be returned to: Council Tax Support Consultation Revenues and Benefits Team Blaby District Council Council Offices, Desford Road Narborough Leicestershire LE19 2EP before 30 September 2018 18

Notes for you to jot down your views to assist with completing the survey 19

What happens next? We will evaluate all consultation responses by 3 December 2018 and will publish the results of our findings online: blaby.gov.uk/consultation 20