Please Note: Pensioners (those who are of an age where they can claim state pension credit) will not be affected by the changes to council tax support. The Isle of Wight Council’s Local Council Tax Support Scheme includes protecting people who are disabled (in other words they would continue to receive council tax support in the same way as they do now, provided there are no changes to their circumstances).
As part of its welfare reforms and its drive to encourage more people back into work, the Government is abolishing the current national Council Tax Benefit Scheme. From 1 April 2013 all local authorities, including the Isle of Wight Council, have to replace it with a local council tax support scheme for all working-age claimants. The Government has told local authorities that claimants of pensionable age will not be affected by any changes and will continue to receive support towards their council tax bills in the same way as they did through Council Tax Benefit. The cost of council tax benefit is currently paid for by the Government. When the new local schemes start on 1 April 2013, the Government will pass that funding across to local authorities, whilst reducing it by about 10%. For the Isle of Wight, if we were to just continue with the current arrangements for the council tax benefit scheme, there would be a shortfall in funding of about £1.8m.
In creating a new local scheme the council had to decide whether to increase council tax, reduce funding for council services or reduce the level of support provided to claimants in order to make up this shortfall.
We were obviously keen that the new scheme is affordable not just for the council, but for council tax payers in general and for those claiming support. On the Island we have around 15,000 people claiming council tax benefit, in other words they receive a reduced or zero bill for their council tax. To work out how much benefit is paid, there are a number of different circumstances and types of income taken into account. All claimants are on low incomes which limit their ability to pay the full amount of council tax. The Government has stipulated that those of pensionable age (those who are of an age where they can claim state pension credit) cannot be affected by the proposed changes, so their entitlement is protected. This means that only working-age claimants are affected. On the Island this amounts to just over half of all claimants.
This means the council had to make some difficult decisions about whether to increase council tax, reduce services (both of which potentially affects all council tax payers and residents) or decide who gets financial support towards their council tax bills and how much we could afford to give them.
The results from this consultation carried out between 24 September – 30 November 2012 were published on our website and formed the basis of a report which was taken to the meeting of the council on 16 January 2013. At this meeting, councillors considered the feedback given through the consultation and the likely impact of any new scheme before making its final decision.
The local scheme implemented for 2013/14 will be a transitional one, which will enable residents to adjust to having to make contributions of a smaller amount in the first year before having to pay the full amounts in the following year (from 1 April 2014). Local Council Tax Support will therefore be restricted to a maximum of 91.5% in year one, then restricting to a maximum of 80% council tax liability in year two. For more information on this support or to use the tools we have provided, please click the links below: