Changes to council tax benefits

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Monday 24 September 2012 2.05pm
You may be aware that the council is proposing to start charging council tax to people currently exempt/receiving benefits. A number of local organisations are opposing this, as this is likely to have a disastrous effect on the most vulnerable.

A number of councils around the country are refusing to implement the changes, including two London ones (Merton and Tower Hamlets).

What are your thoughts on this? (we've just published another comment about this): http://www.peoplesrepublicofsouthwark.co.uk/hold-news/news/2484-much-more-than-2-70-a-week
Tuesday 25 September 2012 9.39am
Does the council have a choice if the law has been changed by Parliament?
Tuesday 25 September 2012 10.07am
The central funding for council tax benefit has been cut by 10% (or arguably slightly more if you take account of rising demand since the baseline is before the worst of the recession).

The Council has a choice of sorts, it could cut services by the equivalent cash amount, and maintain the benefits. I imagine that would cause some protests as well, though.
Tuesday 25 September 2012 1.52pm
Ok I'm a bit confused here...I get the council is getting less money from central government and therfore has to either cut services or raise more money or a comination of the 2 but I don't understand the issue of charging council tax to those previously not charged....was this at the council's discretion? If it was has this changed by legal means or has the council the freedom to change its mind on who it charges without there being a legal requirement?
Tuesday 25 September 2012 11.38pm
The council is getting less money in general, so it has to raise tax or cut spending on services. That's a given whatever happens.

It is also, specifically, being told it has to pay for council tax benefit. The Government used to pay this, it wasn't done by the Council at all, people just claimed it, and then the Government handed over the cash.

Now, the Government is giving the Council the money it used to spend on Council Tax Benefit, minus 10% (ish). This has changed (or rather will change once it finishes going through the House of Lords) as a result of the Local Government Finance Bill.

The Council has the freedom to charge council tax to those people who were previously exempt, or to reduce the discount, with the exceptions that it can't put in any new bands, can't charge pensioners, can't charge students, and can't reduce the single person discount.

If it doesn't reduce the amount it is spending on council tax benefit, it can instead take the 10% as an additional cut in spending (which would be over and above the cuts in general central government funding for councils).

Any clearer?
Wednesday 26 September 2012 10.43am
cheers for the details beingjdc

So if I've got this right....

SC will get the money to pay the benefit from central governement as a general payment instead of central government paying it directly to SC for the single puropse of offsetting the lost income...but they won't get the full amount...around 90% only...so SC could charge those who were entitled to the benefit just a 10% charge and (all things being equal) things would be much the same except for the small council tax charge where previously there had been none.

I'm not guessing it is this simple in terms of overall local authority funding/spending but in terms of Council Tax benefit have I understood it correctly?
Wednesday 26 September 2012 10.54am
hi, sorry, yesterday was mad, here's a few links which may help:
council's official statement/explanation: http://www.southwark.gov.uk/ctbconsultation

guardian article about tory council refusing to implement the changes: http://www.guardian.co.uk/politics/2012/aug/26/council-tax-benefits-revolt?fb=native&CMP=FBCNETTXT9038
Wednesday 26 September 2012 12.02pm
urbanite wrote:
SC will get the money to pay the benefit from central governement as a general payment instead of central government paying it directly to SC for the single puropse of offsetting the lost income...but they won't get the full amount...around 90% only...so SC could charge those who were entitled to the benefit just a 10% charge and (all things being equal) things would be much the same except for the small council tax charge where previously there had been none.
I'm not guessing it is this simple in terms of overall local authority funding/spending but in terms of Council Tax benefit have I understood it correctly?

Yes, give or take, except that while it would be a 10% charge if they charged everyone, you have to factor in that they can't charge students or low-income pensioners.

I think it would be more like a 25-30% charge for the others, on average, not sure about the Southwark numbers specifically, obviously the worst affected are probably places like Eastbourne.

(and if they try to charge it to people who just physically can't pay, the council loses the money from non-collection anyway, and has the extra expense of legal and administrative costs in trying to recover it on top of that).
Wednesday 26 September 2012 1.03pm
That means I will lose my 60pence a week benefit then lol
Wednesday 26 September 2012 1.24pm
OK so in diguise the government are just basically giving the local authorities less money but trying to tie it to the local authority to improve their own income stream by raising the tax (council tax) on those least able to pay....hmmmm
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