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How April’s Council Tax Benefit Changes Could Affect You

The Government is abolishing Council Tax Benefit and Southwark Council is required to adopt a Local Council Tax Support scheme in its place from 1 April 2013.

The Government is also reducing the amount of money it contributes to the new scheme by at least £2.8 million locally.

When creating the new support scheme, Councils must protect pensioners from any changes.How these changes will affect pension age claimants in 2013/14

The following scenario demonstrates how pension age claimants will not be affected by our proposed scheme.

Current Council Tax Benefit entitlement – £711 / £13.64 per week

Miss H is a single woman, aged 71 and lives in a housing association rented flat. She receives £142.70 per week in Guarantee Credit. Miss H has no other income. She receives full Housing Benefit of £117.87 per week to cover her rent.

Miss H lives in a Council Tax band B property and receives a single person discount which reduces her annual Council Tax by 25 per cent. The remaining £711 in Council Tax is paid for in full with Council Tax Benefit.

Proposed Council Tax Support entitlement in 2013/14 – £711 / £13.64 per week

If Miss H circumstances remain the same, she will receive £711 in Council Tax Support in 2013/14. This amount is the same as her current Council Tax Benefit entitlement. Miss H will not be required to pay any Council Tax in 2013/14 assuming that she continues to receive Guarantee Credit.

How these changes will affect working age claimants in 2013/14

The following scenarios are real examples of how the working age groups will be affected by our proposed scheme.

Scenario 1 – Single working claimant with two children

Current Council Tax Benefit entitlement – £711 per year / £13.64 per week

Miss A is a single woman, aged 39 with two children and lives in a privately rented flat. She earns £118.98 per week and receives £390.74 per week in Tax Credits.

Miss A also receives £33.70 per week in Child Benefit. Miss A has child care costs which partly reduce her income in the calculation of her Housing Benefit and Council Tax Benefit entitlement.

Miss A receives full Housing Benefit of £169 per week to cover her rent.

Miss A lives in a Council Tax band B property and receives a single person discount which reduces her annual Council Tax by 25 per cent. The remaining £711 in Council Tax is paid for in full with Council Tax Benefit.

Proposed Council Tax Support entitlement in 2013/14 – £604.35 / £11.59 per week

If Miss A’s circumstances remain the same she will receive £604.35 in council tax support in 2013/14.

Assuming that council tax levels remain the same, Miss A will have to pay £106.65 in 2013/14, which is £2.05 per week.

Scenario 2 – Couple with no children

Current Council Tax Benefit entitlement – £948 per year / £18.18 per week

Mr B is aged 59 and married with no children. His wife is 49 years old and receives Employment Support Allowance of £111.45 per week. There is no other income in the household. Mr and Mrs B receive £92.57 per week in Housing Benefit towards their rent.

Mr and Mrs B live in a Council Tax band B property. Their annual Council Tax Benefit is £948 which covers their full Council Tax.

Proposed Council Tax Support entitlement in 2013/14 – £805.80 / £15.45 per week

If Mr and Mrs B’s circumstances remain the same they will receive £805.80 in council tax support in 2013/14.

Assuming that council tax levels remain the same, Mr and Mrs B will need to pay £142.20 in 2013/14, which is £2.73 per week.

Scenario 3 – Couple with two children and disability in the household

Current Council Tax Benefit entitlement – £1020.96 / £19.58 per week

Mr C is aged 40, married with two children and living in a council rented house. Mr C does not work. Mrs C is unable to work and receives an occupational pension of £135.53 per week as well as Child Benefit, Child Tax Credit and Disability Living Allowance. Mr and Mrs C’s child is disabled.

The total weekly income for Mr and Mrs C is £488.32. Mr and Mrs C receive Housing Benefit of £91.37 per week towards their rent.

Mr and Mrs C live in a Council Tax band D property. They receive partial Council Tax Benefit of £1020.96 towards their annual Council Tax bill of £1218.86. They currently pay £197.90 for the year or £3.80 per week in Council Tax.

Proposed Council Tax Support entitlement in 2013/14 – £867.81 / £16.64 per week

If Mr and Mrs C’s circumstances remain the same, they will receive £867.81 in council tax support in 2013/4. This amount is £153.14 per year less than their current council tax benefit entitlement.

Assuming that council tax levels remain the same, Mr and Mrs C will have to pay £351.04 in 2013/14, which is £6.73 per week.

Scenario 4 – Single claimant with no children and a disability Scenario 3 – Couple with two children and disability in the household 

Current Council Tax Benefit entitlement – £771.19 / £14.79 per week

Miss D is a single woman, aged 56 and lives in a housing association property. She is receiving Incapacity Benefit of £99.15 per week and an occupational pension of £6.16 per week. Miss D receives Housing Benefit of £113.36 per week towards her rent.

Miss D lives in a Council Tax band D property and receives a 25 per cent Single Person Discount. Miss D receives partial Council Tax Benefit of £771.19 towards her annual Council Tax liability of £812.57 leaving her £41.38 for the year or £0.79 per week to pay.

Proposed Council Tax Support entitlement in 2013/14 – £655.51 / £12.57 per week

If Miss D’s circumstances remain the same, she will receive £655.51 in council tax support in 2013/14. This amount is £115.68 per year less than the current council tax benefit entitlement.

Assuming that council tax levels remain the same, Miss D will have to pay £157.06 in 2013/14, which is £3.01 per week.

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