|
Option
|
Commentary/Context
|
Recommended
for consultation?
|
1
|
Maintain
current scheme (no change)
|
Does not
meet objective of cost savings. In addition, there are changes in HB coming
which would mean the CTR and Pension Age CTR / HB schemes would diverge
|
O
|
2
|
Increase
the level of support available to Working Age claimants to previous Council
Tax Benefit Levels (up to 100% for all applicants)
|
Would be
easier to administer and collect but severely exacerbates funding issues.
Does not
meet objective of cost savings and there may be divergence with HB system as
above unless this is addressed.
Over 70
authorities nationally still allow up to 100% support for working age
claimants.
Major
preceptors would not support this option.
|
O
|
3
|
Total
Income Discount (Banded) Scheme
|
Calculate
total income of applicant and partner (where applicable) and put in an income
‘band’. Bands to be determined.
Would make
it simpler from claimants point of view, and there could be less ongoing
changes to entitlement. Cliff edges where benefit drops off as band changes.
Currently
no authority has a similar scheme in operation.
Would
require additional information to be gathered from claimants.
Would need
to pay for software changes (could be expensive).
|
O
|
4
|
Passported
and Income Discount (Banded) Scheme
|
Identical
to the previous scheme, however any applicant who receives a ‘passported’
benefit from DWP will automatically be placed in most generous band, cutting
down on administration.
Only one
scheme like this in operation nationally.
Relatively
simple to understand. However as a high proportion of claimants would
receive a passported benefit so automatically default to a single band the
attractions of this scheme are diluted.
|
O
|
5
|
Simplified
Means Test leading to a Discount Band
|
As current
system but translate means test into a discount band. Thus if claimant were
to change their earnings they may remain in the same band and changes to
entitlement would not be needed. Potential to reduce some administration
costs.
Unclear
whether software can be adapted. If it can, likely to be costly.
No other
council running this scheme.
|
O
|
|
Option
|
Commentary/Context
|
Recommended
for consultation?
|
6
|
Total
Household Income scheme
|
Include
all non-dependant (e.g. adult child) income in means test based on ethos that
the whole household should contribute towards Council Tax.
One
authority has implemented a similar scheme.
More
complicated to administer as details of all household incomes would need to
be collected. Software currently would not allow for this information to be
entered automatically and so this would become a manual process. Thus more
administration for staff.
However
potential for more income to be included in the means test - and thus likely
to deliver savings within total scheme cost.
|
O
|
7
|
Retain Current
Scheme but make changes:
|
|
.
|
A
|
Increase
the minimum % payable
|
MBC currently
requires working age claimants to pay a minimum of 13% towards council tax.
Level of
contribution varies significantly over the country. 76 councils having a nil
contribution rate with 52 schemes having rates over 20%. Medway Council will
be highest in Kent (and possibly nationally) at 35% for 2016/17.
Evidence
there is a “tipping point” somewhere between 20% and 25% after which collection rates are
affected significantly. ‘Tipping point’ severely affects applicants on low or
fixed incomes particularly single persons and couples with no dependants.
Increasing the minimum % that a working age claimant needs to pay beyond a
“tipping point” could be counter-productive and unrealistic.
Consider
option of increasing minimum to 20% (estimated saving £363,000)
|
P
|
B
|
Remove Second Adult Rebate
|
A
taxpayer can presently apply for up to 25% reduction on their liability when
an adult moves into their home who is on a low income. The applicant would
lose their single person discount but could apply for this reduction instead.
The reduction is assessed on the income of the second adult and not that of
the taxpayer who could have any level of income or capital.
This has
been removed in a number of authorities across the country and in East Kent.
There is a limited number of cases in MBC.
Consider option
of removing Second Adult Rebate (estimated saving £16,000)
|
P
|
|
Option
|
Commentary/Context
|
Recommended
for consultation?
|
C
|
Restrict to the equivalent to a Band D
|
The
current Council Tax Reduction scheme uses the full amount of Council Tax charge
irrespective of the band of the property. There are 8 bands (A-H) with Band
D being the national average. It is proposed that where an applicant lives
in a property in band E-H then the Council Tax Reduction will be calculated
on the basis of a band D charge.
Consider
option of limiting to Band D (estimated saving £76,000)
|
P
|
D
|
Reduce Capital limit
|
Currently
claimants are allowed to have capital (excluding property in which they
reside) of up to £16,000 and still be eligible to claim. This limit could be
reduced and it is suggested that this should be reduced to £6,000 or roughly
4 years’ worth of council tax. Used in a number of schemes around the
country and is relatively simple to administer. Will have the effect of
removing the entitlement of some claimants.
Consider
option of reducing capital limit to £6,000 (estimated saving £37,000)
|
P
|
E
|
Include currently disregarded incomes in calculation
of total income
|
Certain
incomes are currently disregarded in full when calculating entitlement for
CTR. These include Child Benefit, Child Maintenance, Disability Living
Allowance and Personal Independence Payments.
Child
Benefit and Child Maintenance were included (i.e. were not disregarded)
within Council Tax Benefit Schemes until as recently as 2009. Nationally
twenty two schemes have reverted to including this income within the assessment.
Disability
Living Allowance (DLA) and Personal Independence Payments (PIP). These
incomes are currently considered when calculating discretionary housing
payments but not included within the calculation of Housing Benefit and
Council Tax Support. There has however been recent controversy at a national
level in respect of the government’s proposal to curb PIP in order to deliver
savings, and the proposal has been withdrawn. Could also impact on vulnerable
groups.
Consider
option of including child maintenance payments in the assessment of income.
(estimated saving £61,000)
|
P
(child maintenance only)
|
|
Option
|
Commentary/Context
|
Recommended
for consultation?
|
F
|
Introduce changes to non-dependant charges
|
Introduce
a standard charge for non-dependants who live in a property. Currently,
non-dependant deductions can vary from £0.00 to £11.45 depending on level of
income. A standard charge would be easier to administer and could contribute
to savings within the scheme. Suggestion rate is £10 per week.
Consider
option of introducing a standard deduction of £10 per week for non-dependants.
(estimated saving £74,000)
|
P
|
G
|
Introduce Minimum income floor for self -employed
claimants
|
Currently
self-employed claimants are asked to declare their own level of income, with
many claimants declaring nil (or close to nil) after taking into account
expenses. Claims are difficult to administer and challenging self-declared
income levels can be protracted, time consuming and difficult to evidence.
The
Universal Credit assessment criteria includes a clause whereby a
self-employed claimant is allowed to declare nil income in their first year
of operation and then after that initial period to establish the business
they are then assessed at either their declared income or at a minimum income
floor calculated at 35 hours per week multiplied by the living wage. It may
be necessary to consider an alternative for people who are unable to work
full time (primarily single parents with young children).
Consider introducing a minimum income floor for
self-employed claimants based upon the living wage at 35 hours per week for
full time or 16 hours a week for part-time workers. (estimated saving £250,000)
|
P
|
H
|
Align Scheme with HB and Pension Age CTR changes
|
Central
Government has announced significant changes to HB including the removal of
certain premiums, a limitation on the number of dependants that can be
included in the calculation, a reduction in the period that claims can be
backdated and changes to entitlement when absent from the UK.
If we are
to retain a scheme similar to the current one, it will be important to ensure
it is aligned with HB as far as possible to aid understanding as well as
efficiency of processing. These changes will form part of the prescribed
requirements for the Pension Age CTR scheme.
Changes
would apply to new claimants from April 2017.
|
P
|
I
|
Change
income tapers to incentivise work
|
The
current taper (withdrawal rate) for assessing CTR claims is 20%, consistent
with the previous CTB scheme. Increasing the percentage would act as a
disincentive to take employment or work more hours.
|
O
|