Introduction
Also known as Council Tax Support, this is currently administered by the District Councils in Somerset and provides those on a low income with help towards paying their Council Tax. From 1 April 2023 it becomes the responsibility of the new Somerset Council.
From 1 April 2023 Mendip District Council, Sedgemoor District Council, Somerset West and Taunton Council, South Somerset District Council, and Somerset County Council will merge into a single new Council called Somerset Council.
Currently, each district runs their own scheme. The creation of a single Somerset Council requires a single unified approach to supporting taxpayers on low incomes to help pay their Council Tax.
Anyone currently getting a Council Tax Reduction will not have to make a new claim. We will work out their new award from 1 April 2023. People who are adversely affected by the scheme may be eligible for help through an Exceptional Hardship Scheme.
Background
Council Tax Reduction (CTR) replaced the national Council Tax Benefit scheme on 1 April 2013. The changes meant local billing authorities had to create a local scheme for working age customers. The scheme for pensioners is set by central Government and will remain the same from 1 April 2023 – the changes detailed here only affect working age customers.
Each of the current Somerset districts run different CTR schemes for working age people. At its meeting on 23 November 2022, the new Council agreed to a new CTR scheme for the whole of Somerset.
The new CTR Scheme
The new scheme for Somerset does not exactly mirror any of the current district’s schemes which means the majority of people currently getting CTR will get a different amount from April 2023, with approximately 75% of CTR customers getting more or the same as they get now.
The new scheme is a banded income discount scheme, similar to the schemes currently run by South Somerset and Somerset West and Taunton Councils, but different to the means-tested schemes run by Mendip and Sedgemoor Councils.
The banded income discount scheme is:
- Easier to understand;
- Easier and more efficient to administer; and
- Copes better with frequent changes to income, in particular, those working and on Universal Credit.
The new CTR scheme for Somerset will give those customers on the lowest incomes a 100% discount.
The banded income discount scheme in Somerset from 1 April 2023
| Band | Discount (%) | Single person | Single person with one child | Single person with two children | Couple with no children | Couple with one child | Couple with two children |
|---|---|---|---|---|---|---|---|
| 1 | 100 | £0 - £95 | £0 – £160 | £0 - £220 | £0 - £140 | £0 - £200 | £0 - £260 |
| 2 | 75 | £95.01 - £155 | £160.01 - £220 | £220.01 - £290 | £140.01 - £210 | £200.01 - £260 | £260.01 - £330 |
| 3 | 40 | £155.01 - £190 | £220.01 -£255 | £290.01 - £370 | £210.01 - £260 | £260.01 - £295 | £330.01 - £410 |
| 4 | 25 | £190 - £235 | £255.01 - £290 | £370.01 - £480 | £260.01 - £310 | £295.01 - £330 | £410.01 - £520 |
Claimants getting Income Support, income-based Jobseekers Allowance or income-related Employment and Support Allowance will fall into band 1 and get a 100% discount.
- All other discount levels are based on the net income of the applicants and their partner (if they have one);
- The scheme allows for variation in household size with the levels of allowable income increasing where an applicant has a partner, and/or children;
- No restriction on claimants living in the highest Council Tax property bands;
- There will be no deductions made for any non-dependants living in the home;
- To encourage work, there is a disregard of £25 a week from all earnings. Income bands are at a higher rate to help working families;
- Disability benefits such as Disability Living Allowance and Personal Independence Allowance are fully disregarded
- A further £30 a week when working out income where any applicant, partner or dependent child is disabled;
- Disregard income from Carers Allowance, the support component of Employment and Support Allowance, Child Benefit, any Child Maintenance, war pensions and war disablement pensions;
- Disregard an amount of the housing element within Universal Credit; and
- Anyone with capital or savings of £6,000 or more will not get any CTR.