Council Tax Reduction scheme 2020/21

Introduction

We are proposing to make some changes to our current Council Tax Reduction scheme in April 2020. Information about this is provided here to help people who are affected understand what is happening to support them in giving us their views on what we are proposing.

Proposed Changes to our scheme for 2020/21

1. To rename the Income Bands to 1,2,3 and 4

Following feedback from our customers we are proposing to rename the income bands to 1,2,3 and 4 to remove the confusion between this and council tax property valuation bands which are named A to H. There is no impact associated with this change.

The following table shows how the bands will be renamed.

Band Discount
Band 1 90%
Band 2 85%
Band 3 50%
Band 4 25%

 

2. To amend the date of a change in circumstance from the date it occurs:

Currently the rules for change in circumstances in our Council Tax Reduction scheme mirror those of Housing benefit which means that a change is applied on the Monday following the change. As customers have fedback that this is complicated and confusing, we are proposing to amend this so that change in circumstances are applied from the actual date of change. This will mirror the rules for council tax discounts and exemptions.

 

3. Increase income band values by 3% in 2020/21 and then each year after by September Retail Price Index % (RPI%):

 We have not increased our income banded values for two years and as wages and benefits have started to increase, we need to reflect this in our scheme so that we can maximise support for our residents. It is also proposed that we continue to increase income bands each year in line with the retail price index percentage and build this into our scheme so that further consultation on this is not required.

The proposed changes to the income bands for 2020/21 will be:

Discount Passported

Single

Income Band £

Couples

Income Band £

Family with 1

child £

Family with 2+

Children

Band 1   90% Relevant benefit 0.00 to 120.00 0.00 to 165.00 0.00 to 215.00 0.00 to 270.00
Band 2   85% N/A 120.01 to 160.00 165.01 to 205.00 215.01 to 260.00 270.01 to 310.00
Band 3   50% N/A 160.01 to 240.00 205.01 to 280.00 260.01 to 340.00 310.01 to 380.00
Band 4   25% N/A 240.01 to 310.00 280.01 to 360.00 340.01 to 415.00 380.01 to 465.00

 

4. Increase the non-dependant charge from £2.50 to £3.00 per week in 2020/21 and by £0.25 each year after

A flat rate charge of £2.50 per week is currently used for each non-dependant. It is proposed that this change is increased to £3.00 to reflect increases in wages and benefits. In comparison to the Government's protected scheme for pension age people this is still less than the lowest deduction of £4.00, that is currently used. It is also proposed to increase this by £0.25 each year after to take account of increases in wages and benefits. It is proposed that this change is built into the scheme going forward so that further consultation on this is not required.

A non -dependant is a person over 18, not responsible for council tax and not disregarded.

 

5. Simplify the assessment of self employed income

Currently the income used in the calculation of self-employed income requires onerous documentation relating to self-employed accounts or a self-assessment and this often delays awards. The assessment is also complex for customers to understand and time consuming to process.

It is therefore proposed to change the assessment of self-employed income by the number of hours worked multiplied by National Minimum Wage. In minimising any impact on our residents, it is proposed to phase this change in and use a percentage of the National Minimum Wage over four years as follows:

 

 

Year 2020/21 2021/22 2022/23 2023/24
% of National Minimum Wage Used 70% 80% 90% 100%

 

 

Other information

Pension age people are not affected by these changes and they will continue to have council tax reduction assessed in the same way through the Governments Council Tax Reduction default scheme.

You can see full details of the scheme at Draft banded scheme or you can see a summary of the scheme

You can also give us your views on these proposals at https://www.letstalknewcastle.co.uk/consultations/info/314

Consultation ends 15 December 2019.

 

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