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Making welfare work locally: council tax support policies

16 September 2014

In April 2013, council tax benefit (CTB) was abolished. The budget, minus 10 per cent, was passed to local authorities to put in place their own council tax reduction schemes.

Under the Welfare Reform Act, local authorities were required to provide a 100 per cent council tax reduction to pensioners on a low income; ensure their schemes encouraged people to find and stay in work; and protect people who were vulnerable. Deciding who is ‘vulnerable’ is at the discretion of each local authority. They were also given more flexibility to charge properties previously exempt from council tax liabilities, such as empty properties. This gave them additional revenue raising opportunities.

Local authorities were faced with a choice of how to deal with the 10 per cent reduction in budget. With pensioners protected this meant a cut of around 19 per cent for working age residents or as much as 33 per cent in areas with high pensioner populations.(IFS, Reforming Council Tax benefit, 2012) They could pass on this full cut; use alternative sources of revenue to make up the shortfall and continue to provide full support; or they could pass only part of the reduction on and make up the rest of the shortfall from alternative sources.

In Wales, the Welsh Assembly Government has provided funding and legislation to ensure similar protection for low income households as under council tax benefit.  In this showcase, we are therefore only looking at examples from within England.