London borough plans to increase earnings threshold for council tax support

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

A London borough is planning to increase the earnings threshold used to calculate levels of council tax benefit as it looks to create its own support system with a £1m shortfall from central Government.

Those measures, alongside plans to make claimants living in more expensive homes pay more, will soon be out for consultation by the London Borough of Richmond.

The Government plans to reduce the grant that pays for council tax benefit - claimed by nearly 6 million people - by 10 percent and has asked councils to develop their own schemes which will kick off from next April.

This, says Richmond, means it must either reduce payments to current claimants by more than £1m or find other savings or income in order to manage the cut.

The changes have led Richmond to be among the first London authorities to consult residents on a new scheme which, it says, aims to protect the borough’s most vulnerable residents and support incentives to work, whilst identifying savings in other areas.

The possible scheme, it says, will also see 900 residents gain additional benefit.

However, as part of its plans to redistribute the support, it plans to increase the earnings threshold used to calculate the level of the local council tax benefit. A key feature of this change, it says, is to incentivise people into work.

It also plans to abolish the second adult rebate - available to those living with another person on a low income - and increase non-dependant deductions.

Cllr Geoffrey Samuel, Richmond Council Cabinet Member for Finances and Resources, said: “We have looked at all the options open to us and have focused on producing a scheme that we believe is fair – fair to existing benefit recipients, but fair also to all of our residents.

“We now need to have your views. We want to make sure that residents have the chance to get involved in deciding how this funding gap is bridged. So I would urge as many people as possible to take part in the consultation.”

Other plans on the table include limiting the maximum amount that can be claimed. This, it says, will result in a cap on the amount of council tax benefit that residents living in the most expensive council tax bands can receive.

It also wants to freeze the benefit at the level set in 2013, so it won't increase with inflation - reducing the value of the benefit over time.

Pensioners and those who are identified as vulnerable through receipt of other benefits, such as disability benefits or carer’s allowance will be exempt from any changes to the scheme.