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Have your say on the Council Tax Reduction scheme for Lewes district

  • Latest update: This consultation opened on Monday 2 August and will run until Sunday 31 October at 5pm

The government has stopped the national Council Tax Benefit scheme and since April 2013 local authorities have had to put in place a local scheme to help working-age residents on a low income to pay their Council Tax. 

This is called the Local Council Tax Reduction Scheme which works by reducing the amount of Council Tax the person must pay.

The government sets the rules for the help given to those of pension age.

The current Council Tax Reduction scheme for the working age

The 2020/21 scheme, contains three elements that Lewes District Council are thinking of changing. 

They are:

  1. That the maximum reduction a working-age claimant can get is 80% of their Council Tax liability.
  2. That if a claimant qualifies for less than £5 per week, they do not receive any reduction. This is known as the £5 minimum award.
  3. That certain self-employed claimant’s earnings are based on the hourly rate of the national living wage X 35 

Cost of the current scheme

The current cost, in terms of Council Tax foregone, of the schemes and the number of households receiving a reduction as at 30 June 2021 is set out below:

Age Number of households Cost

Working age

3,191

 £3,473,804.73

Pension age

2,767

 £3,620,201.74

Totals 

5,958

 £7,094,006.47

The cost of the scheme is shared between the preceptors, Lewes District Council, East Sussex County Council, Sussex Police, the Fire and Rescue Service and Town and Parish Councils in proportion to their share of Council tax receipts. 

The table below shows those costs:

Preceptors Share of Council Tax Cost

Lewes District Council

 9.93%

 £704,434.84

East Sussex County Council

 70.67%

 £5,013,334.37

Sussex Police

 9.47%

 £671,802.41

East Sussex Fire &Rescue 

 4.53%

 £321,358.49

Town and Parish Councils 

 5.40%

 £383,076.35

Totals 

 100%

 £7,094,006.47

The proposals for 2022/23

The council is considering:

  1. Increasing the maximum reduction to 100%
  2. Removing the minimum awards so a claimant can qualify for, and be awarded, less than £5 per week
  3. Basing a self-employed claimant’s income on their actual earnings

If these changes are adopted, they will increase the cost of the Working Age scheme as set out in the tables below (based on 2021/22 Council Tax charges and current caseload levels). It should be noted that changes in the numbers of working age and pension age claimants will impact on the overall cost of the schemes. 

Revision
Cost  

100% maximum reduction

 £930,850

No minimum award

 £1,979

Removing the Minimum Income Floor

 £200,000

All changes

 £1,132,829

Changes ESCC LDC Police Fire Town and Parish

 100% maximum reduction

 £657,366

 £92,593

 £88,301

 £42,239

 £50,351

 No minimum award

 £1,398

 £198

 £187

 £89

 £107

 Removing the Minimum Income Floor

 £141,340

 £19,860

 £18,940

 £9,060

 £10,800

 All changes

 £800,104

 £112,651

 £107,428

 £51,388

 £61,258

Examples

The table below gives examples of how these changes will affect various household types. Examples are based on a Band C council Tax charge of £39.36 per week (£2,052.53 per year).

There are more detailed breakdowns of these examples available to download at the end of this page. 

Examples

Current Weekly Council Tax Reduction

Weekly Council Tax Reduction if proposed changes are implemented

Annual Council Tax Reduction

Single person receiving a 25% single person discount with an income of £168.00 per week

 Nil (As the CTR would be £4.96 per week)

 £10.86 

 £566.27

Single person in receipt of Income Support

£23.62

£29.52

£1,539.26

Single person with earnings of £150.00 per week

£8.56

£14.46

£753.99

Couple in receipt of Income Support

£31.49

£39.36

£2,052.34

Couple with 1 Child and an income of £250.00 a week

£22.22

£30.09

£1,568.98

Lone parent earning £215 per week

£12.81

£18.71

£979.59

Self-employed single claimant with earnings of £100.00 per week where the minimum income floor has been applied

Nil

£24.46

£1,275.41

Impact on Lewes District Council’s finances

If the changes are adopted it will result in a reduction in the Council Tax due to the council of £112,000.

To offset this potential loss of income the council’s Recovery and Reset programme, agreed by Cabinet in September 2020, looks at ways to increase efficiency and thereby reduce costs across the council’s services.

Impact on Council Tax Collection rate

If the minimum award is increased from 80% to 100% the collection rate would be expected to increase although at this stage it is difficult to forecast as we emerge from the Covid-19 pandemic and the consequential economic impact there could be on the collection rate which won’t be fully known until towards the end of the financial year.

By increasing the level of Council Tax reduction it will reduce the cost and time associated with collecting small balances. This would enable the additional resource currently funded by the main preceptors to focus on activity to sustain and grow the Tax Base in the future. For example, this could be by extending the remit to undertake single person discount reviews for working age claimants in receipt of Council Tax reduction.  

Scheme rules

A draft of the scheme rules including the changes are available to download at the end of this page.

Community Wealth Building

The council has made a commitment to Community Wealth Building in its Corporate Plan adopted in February 2020. Community Wealth Building uses the combined power of organisations, businesses and communities to keep as much wealth as possible in the local economy through the creation of new jobs and new locally owned enterprise.

 

Reducing the amount of Council Tax that the most financially vulnerable have to pay supports that commitment by increasing their disposable income which could be spent on goods and services in the local area thus increasing employment opportunities and contribute to business growth.

Have your say on the proposals

We have provided a survey to capture the views of local residents and organisations on the proposals.

Take the survey

To request this information in a different language or format, including hard copy, please email CustomerFirst@lewes-eastbourne.gov.uk

Example 6: Lone Parent with 1 child, earning £215 per week

Example 6: Lone Parent with 1 child, earning £215 per week
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Created: 29 July 2021
Last Modified: 29 July 2021