Councillors are to discuss plans for a new scheme to help Lichfield and Burntwood residents struggling with their council tax bills.
Lichfield District Council’s overview and scrutiny committee will examine a new Local Council Tax Reduction scheme at a meeting tomorrow (17th November).
The revisions would see some claimants on “very low incomes” awarded a 100% reduction in their bills.
A report to the meeting from Cllr Rob Strachan, cabinet member for finance, said such a change would move away from a previous stance on council tax collection.
“While the principle of all working age households paying ‘something’ was initially thought to be a positive approach, the reality is that households on the lowest incomes have been unable to pay this amount, leading to additional court costs, and enforcement costs and a reduction in customer wellbeing.
“These charges and costs often need to be written off as uncollectable.”
Cllr Rob Strachan, Lichfield District Council
The new proposals would also see changes such as:
- Allowing residents in all council tax bands to claim council tax reduction if eligible.
- Not considering the housing element of Universal Credit, Personal Independence Payments, War Pensions, Carer’s Allowance, Child Benefit and Disability Living Allowance when calculating income.
- Introducing a standard £50 per week earnings disregard for all working applicants.
- Limiting the number of dependant children within the calculation for council tax reduction to a maximum of two for all applicants.
The report said the changes were needed to create more certainty for the local authority and claimants.
“The administration grant the council receives from government is reducing year-on-year, however the cost of administering the scheme is not reducing. This is primarily due to inbuilt complexities in the current scheme – for example every time an applicant’s income changes, their case must be reassessed, and their award must be reprofiled.
“Universal Credit (UC) is undoubtedly a contributing factor to this, especially for claimants who are in employment. Claimants’ UC is recalculated every month which can generate new files for the council to process.
“For claimants receiving fluctuating wages, this means they receive a revised award every month and, therefore, a revised council tax bill, which is costly to administer and deliver.
“This reprofiling of payments creates a high level of uncertainty for both customers and the council.”
Cllr Rob Strachan, Lichfield District Council
The council said there were around 2,370 working-age claimants for the scheme which costs more than £2.4million a year to deliver before administration was factored in.
“The cost of administering the scheme remains high, while customer satisfaction is reducing as customers are often confused by the nature and regularity of correspondence they receive and are less able to budget and manage their money based on fluctuating awards.
“The ability to award 100% reduction to those on the on very low incomes will prevent hundreds of households being chased for small amounts of debt, as well as reduce debt recovery related costs.
“Studies [by the Institute of Fiscal Studies] have shown that the collection of a minimum amount is expensive, with recovery fees often exceeding the debt the customer originally owed.”
Cllr Rob Strachan, Lichfield District Council
