Council Tax benefit replacement consultation

Did you know?

The government abolished the national Council Tax Benefit Scheme from 1 April 2013. It was replaced by local schemes, which were to be developed and administered by local councils.

The government funding given to councils for local schemes is 10 per cent less than the funding allocated to the national scheme – a difference of about £2.7 million in Tower Hamlets.

This means that the council is faced with the choice of either:

  • passing on the government cuts to residents who currently receive Council Tax Benefit, by cutting their Benefit or
  • absorbing this cost into the council’s budget

The government has promised that pensioners will be protected from the effects of this change. This means if the council decided to pass the cut on to residents, the burden of paying extra Council Tax would fall exclusively on working age residents on low incomes.

For April 2013 to the end of March 2014, the council absorbed the cost from within the councils budget.

Consultation: Tell us what you think about the Council Tax Benefit Replacement Scheme for 2014/15

The council is seeking your views about its plans to implement a local council Tax Benefit Replacement scheme for the 2014/15 financial year that is broadly based on the current Council Tax Replacement provision (2013/14).

This will mean Tower Hamlets residents will continue to be protected from the government’s cuts, and the council will find the shortfall of funding for the scheme from its wider budget.

After 2014/15, the scheme will be reviewed on an annual basis taking into account the needs of residents, the cost of provision and the funding available.

Go to My Tower Hamlets to give us your view on whether the council Tax Benefit Replacement Scheme should change.

Background information:

  • If the council were to pass the government’s cut on to working age residents currently receiving Council Tax Replacement, residents would have to pay an extra £3 in Council Tax per week (approximately). Given the impact of the government’s welfare reforms and rising cost of living, this will have a detrimental effect on a significant proportion of Tower Hamlets residents.
  • The residents who will be affected are those on low incomes who are also likely to face further cuts to their income as a direct result of the government’s wider welfare reform programme. For more information on this, visit www.dwp.gov.uk/policy/welfare-reform/
  • Low income levels in the borough mean many families are forced to rely on benefits, including Council Tax Replacement, to supplement their household income.
  • The council has a number of strategies in place to help lift residents out of poverty and to support them in accessing training and employment opportunities. A local Council Tax Benefit Scheme to replace the current scheme will support the council’s ongoing work.