The Government is abolishing the current national council tax benefit scheme so from April 1, 2013, every council must have its own local council tax reduction scheme. The money the Government gives councils to cover the cost of benefit payments is also being cut by around 12%. This means that the council will receive about £3.2 million less in 2013/14 to pay for its local scheme.
The council has decided that it could not meet the whole cost of the Government cuts to council tax support without affecting other vital services. Because of this, Wolverhampton’s local scheme can no longer cover anyone’s council tax liability in full. This means that in future, everyone of working age will have to pay at least 8.5% of their council tax charge.
Before deciding on these changes, the council wrote to every household in the city asking for views and suggestions on the proposed local council tax reduction scheme and other ways of coping with the Government cuts. Of the people who responded, 57 per cent either agreed or strongly agreed with the council’s proposals.
The council understands how difficult it will be for many people to cope with these changes. We also realise that you will want to know how they affect you personally. Unfortunately, we cannot tell you that at the moment, but hope to do so as soon as we can.
Until then, I have included three examples with this letter to help you understand what the changes may mean for different people.
Paying your Council Tax
Once we are able to advise you how much to pay, we will send you your council tax bill for 2013/14. The easiest way to pay is by Direct Debit. If you do not already pay this way, you can arrange this by calling us on 01902 555801 with your bank details to hand.
You must set up your Direct Debit with us by March 1st 2013 so that your payment plan is in place for the payments to start in April 2013.
Paying by Direct Debit allows you to:
- Choose one of four payment dates to suit you to pay over 10 months or 12 months
- Pay weekly or fortnightly to spread your payments even further
- Pay your council tax automatically so you don’t have to remember to write out cheques or queue up to pay with cash.
Paying your council tax by Direct Debit not only saves the Council money, which means that we can spend more on the services that are important to you, it also means that you are in control of your council tax bill and can avoid falling into arrears.
Mrs S Martin
Head of Revenues and Benefits
Examples of the proposed changes
Example 1: Mr A
Mr A is unemployed and lives on his own. His property is in Council Tax Band A.
In 2012, his Council Tax liability was £976, which reduced to £732 with the Single Person Discount. Because Mr A also received 100% Council Tax Benefit he paid no Council Tax.
In 2013, Mr A’s Council Tax liability is still £976. It is still reduced to £732 with the Single Person Discount. However, he is now entitled to a maximum of 91.5% reduction in his liability, not 100%. He will now have to pay £62.22 in Council Tax for the year.
Example 2: Ms B.
Ms B is a single parent who lives with her two daughters. She works part-time and receives Tax Credits. Her total weekly income is £281.76, not including Child Benefit. The council does not take Child Benefit into account when assessing Council Tax Benefit claims. Her property is in Council Tax band A.
In 2012, her Council Tax liability was £976, which reduced to £732 with the Single Person Discount, because she is the only adult in the property. Ms B received £511.16 in Council Tax Benefit, leaving her to pay £220.84 in Council Tax.
In 2013, there is no change to Ms B’s Council Tax liability. It remains at £976 and is reduced to £732 with the Single Person Discount. However, her Council Tax Support would be reduced to £448.76 leaving her to pay £283.24. Ms B will have to pay an additional £62.40 Council Tax in 2013.
Example 3: Mr and Mrs C.
Mr and Mrs C are a couple who live with their son. Mr C works full time and the family receive Tax Credits. Their total weekly income is £270.00, not including Child Benefit which the Council does not take into account. Their property is in Band A.
In 2012, Mr and Mrs C received £465.92 in Council Tax Benefit, leaving them with £510.08 to pay.
In 2013, there is no change to Mr and Mrs C’s liability. It remains at £976. However, their Council Tax Support will be reduced to £382.92, leaving them to pay £593.08. Mr and Mrs C would have to pay an additional £83.00 in Council Tax in 2013.
Wolverhampton City Council is trying to provide help to those affected and has continued to support Welfare Rights advice services across the City. These services can help with energy bills, budget, benefit and debt advice.
- Wolverhampton Citizens Advice Bureau, 26 Snow Hill, Wolverhampton, Tel 01902 572006