Cornwall Council consulting on changes to council tax benefit system

Following the Government’s decision to reform the benefits system, all working age people in Cornwall currently receiving council tax benefit are likely to see changes to the amount they receive. 

As part of the Government’s changes to the national benefits scheme, responsibility for council tax benefit will be transferred to local authorities and Cornwall Council has to create its own Localised Council Tax Support (CTS) scheme. 

The Government is reducing the amount of funding available by 12.5% which means that Cornwall Council will have £6 million less to distribute to people who are entitled to council tax benefit in Cornwall. 

The Government has stated that pensioners must be protected from any reduction in council tax benefit so the Council has to put in place a new scheme which is as fair as possible to people of working age who claim council tax benefit. 

The Council has to introduce a new scheme in Cornwall by 31 January 2013 or the Government will impose their own default scheme which will be largely based on the existing council tax benefit scheme but with reduced funding. 

The Council has looked at a number of options and developed a draft proposal - called the preferred option - which we want to hear people’s views on and to give them the opportunity to help shape the scheme when a report goes to Cornwall Council members at their meeting in December. 

The preferred option is that everyone of working age who receives Council tax benefit should pay at least 30% towards their council tax bill i.e. receive less council tax benefit, in order to make up for the reduction in Government grant. This approach means that the Council would not have to make any changes to eligibility criteria or assessment processes, or make any other changes to the existing council tax benefit system. The Council is also proposing to introduce a number of other measures to make the new scheme more efficient and easier to understand. 

Leaflet and printed copies of the consultation questionnaire will be available in our One Stop Shops, or from the Council's Benefits Contact Centre by phoning them on: 0300 1234 121 or emailing them on: benefits@cornwall.gov.uk. 

The formal consultation will close at 9am on Monday 12 November.

The Council's preferred scheme is option two with the measures outlined in option three below. 

Option one – Do nothing

If we do not adopt our own scheme in Cornwall by 31 January 2012 the Government will impose their own default scheme on us which will be largely based on the existing Council tax benefit scheme. Although existing council tax benefits would not be affected the Government will still reduce our grant by approx £6m and we will have to find other ways of making the savings which could mean other service areas may be affected or Council Tax increasing. 

Option two – Limiting benefit available to 70%

We propose to introduce a scheme that offers up to 70% rather than 100% support for people who receive benefit towards their Council Tax. This scheme is intended to recover the £6m we will lose from the reduced Government funding.  Everyone of working age who receives Council tax benefit would have to pay at least 30% towards their bill. This scheme is intended to recover the £6m we will lose from the reduced Government funding so other service areas would not be adversely affected. 

Option three – Changing some Council tax benefit measures

A number of measures to help make the scheme easier to administer and therefore more efficient have been considered, including:

• Remove the second adult rebate scheme which prevents a householder from receiving a single person reduction on their council tax because they have another adult, on a low income, living in their property.
• Reduce the capital limit someone is allowed to have and still be able to receive council tax benefit from £16,000 to £6,000.
• Limit entitlement to a maximum of Council Tax Band D preventing people who live in houses in a higher council tax band from claiming a higher benefit.
• Remove the ability to back date an award of a benefit to when it is applied for.
• Remove underlying entitlement to recover overpayment when someone has failed to notify the Council of something relevant to their claim.

For further details, see the Cornwall Council website at Council Tax Benefits.

September 2012