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Council Tax Support? A benefit determined by postcode not need

Council Tax Support? A benefit determined by postcode not need 442 KB

Council Tax Support (CTS) is a benefit that gives people on low incomes a reduction on their council tax bill. CTS replaced Council Tax Benefit (CTB) in 2013, when support for paying council tax in England was localised. Each local authority now has its own CTS scheme. 

Since then, the level of council tax debt has more than doubled. We see this in the people coming to us for help; nearly half of our debt clients who receive CTS are still in council tax debt. 

Most councils offer a less generous scheme than the old CTB. The majority of schemes have a minimum payment: a proportion of council tax that all working-age residents must pay, regardless of income. Some schemes also limit support depending on which council tax band you live in. These variations mean the same household could have substantially different entitlements depending on where they live.

CTS doesn’t always work well with Universal Credit (UC). Like UC, CTS is tapered away as people earn more, and the interaction between taper rates places a double top slice on earnings for those looking to increase their income. UC has also led to local authorities introducing income-banded schemes to reduce the administrative burden of CTS. These schemes have caused a number of problems for the people we help.

What’s more, millions of people are missing out on CTS altogether because of factors like digital exclusion and lack of awareness. 

The CTS system needs rethinking. At one end of the spectrum, proposed reforms include ensuring that all schemes offer a 100% discount for those on the lowest incomes (removing minimum payments), and scrapping band caps that can penalise people who have no choice over where they live. At the other end, there are administrative changes like the automation of CTS applications. While large-scale reform does come at a cost, other changes don’t come with the same price tag and would make a real difference in improving fairness and consistency across local CTS schemes.