Reforms leave millions facing bills of up to £600
WEDNESDAY 30 JANUARY 2013Millions of low-income households face a rise in their council tax bills costing them up to £600 a year from April under a “poll tax bombshell”, according to new study.
People in low-paid jobs and those on benefits who currently pay little or no council tax will be hit with increased bills within months in three out of four local authorities, it has emerged.
Most councils have decided to reduce the council tax benefit available for residents on low incomes after central government imposed a 10 per cent cut on the total subsidy budget. At present 3.2 million working-age households receive such support.
The first picture of the new system’s national impact emerges in a survey by the Resolution Foundation think-tank, which has compiled the intentions of 184 of the 326 local authorities in England. All councils must decide on their new systems by today.
About 74 per cent of those 184 councils will demand a new or higher payment from those on low incomes, meaning their support will be less generous than it is now. Two in three councils will impose a flat-rate cash cut.
Although the Government has provided a £100m transitional grant for councils, some Conservative MPs are worried about the prospect of a “second poll tax”. The flat rate charge played a big part in Margaret Thatcher’s downfall as Prime Minister in 1990 and was scrapped after she was forced to resign. At present, means-tested council tax benefit provides support to 5.9 million families, 3.2 million of which are of working age. It is being abolished on 1 April, when councils will provide local support.
They must maintain help for pensioners but there is no obligation to do so for the disabled, some of whom may face new charges. It is not yet clear how many disabled people might face cuts. According to today’s report, many of the 2.5 million working-age jobless people on council tax benefit, who now pay no council tax, will have to find between £96 and £255 a year.
Of the 700,000 now receiving the benefit who are in work, most of whom pay some council tax, the worst affected will be single parents working part-time with children in childcare, whose council tax will range from £96 (a 55 per cent rise) to £557 a year (a 333 per cent increase). A typical couple with one partner in work will see their bills rise by between £96 (up 12 per cent) and £304 a year (up 37 per cent).
The report, No Clear Benefit, warns that the shake-up could undermine the drive to make work pay by phasing in universal credit, which will streamline the benefits system, from this year.
Although the Government argues that “virtually no households” will lose more than 80p in the pound for every extra hour they worked, the foundation says that nine in 10 of those who will be on universal credit and who also receive council tax support look set to face tax rates of about 81p.
The think-tank found that many authorities are setting aside a reserve fund to cover non-payment of council tax under the new regime. With some people previously exempt being asked to pay £2 a week, the costs of pursuing non-payers in court may outweigh the revenue to the town halls, it warned. Council tax payers in Scotland and Wales are not affected because their devolved administrations will cover the 10 per cent funding cut.
Gavin Kelly, the foundation’s chief executive, said: “Millions of England’s poorest households… are already very close to the edge given falling wages, tax credits and benefits. Very few of those currently exempt from paying the full rate of council tax are expecting a large new bill to drop on to their doormat this spring. When it does, they are going to find it hard to cope.”
Brandon Lewis, Local Government minister, said: “Spending on council tax benefit doubled under [Labour] and welfare reform is vital to tackle the budget deficit we have inherited. Under the last administration, more taxpayers’ money was being spent on benefits than on defence, education and health combined. Our reforms will localise council tax support and give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work. We are ending the something for nothing culture and making work pay.”
N.B. Photo added by Black Triangle
The Government may include parental drug or alcohol addiction when it brings in a new way of measuring child poverty that is not based solely on income, Iain Duncan Smith will say today. The Work and Pensions Secretary will reveal that a poll conducted for his department found that three-quarters of the public (74 per cent) believe that such addiction should be the most important issue when defining child poverty.
The Independent
8 Responses
Well i received my letter yesterday regarding this saying i will have to pay an extra 10%…Im disabled,poor,pissed off and fetching my pitchfork to go slay the monster at the big house…..protect the vunerable my crippled ass
yep ids got his table full while we starve go cold but now they affecting the working man they find riots on their hands but there again they behind the line hiding away jeff3
They are fond of saying this or that has doubled, the population has almost doubled in the last hundred years so no surprises there then surely!
Also greedy private landlords are picking up and pocketing a very large slice of the benefit bill.
Why are pensioners almost always protected and exempted from many changes/charges/benefit cuts etc.? I’m not saying that they shouldn’t have some protection and bus passes etc., but feel it’s gone too far and working age people, even if they are disabled, seem to have to take the can for everything. Lets face it, many current pensioners are pretty well off and us who aren’t yet pensioners, have little or no chance of gaining what they have, when and if we ever get to that age!
Because a good proportion of them are the ones that support the new Nazi party, if they are not affected by any of these cuts they will continue to vote Tory. It’s simply buying votes.
It’s interesting that the media are starting to wake up to the fact that these cuts are now also going to affect people working on low wages.
I don’t get the Brandon Lewis’ quote about making work pay. How does cutting housing benefit for low paid workers help to make work pay? What a completely illogical statement but hardly surprising coming from a government stooge.
With ever increasing prices in transport fuel, rents, gas, electricity and food you can only squeeze so far until there is nothing left to give.
I stongly believe that things will change this summer and people will fight back saying enough is enough.
Shielding money invested in out of reach tax havens, such as the Cayman Islands is one of the number one priorities of the coalition government. All fiscal institutions in the uk are sheltering obscene wealth in these dirty little stashes. There are no principles or morals when it comes to hiding money for no other reason, but to escape taxation.
Starbucks, Amazon and the like, are visible to the electorate and are used as eye candy to deceive and make out something is being done. This is just an exercise to appease.
Nobody will ever know the extent of this repulsive disease that eats away at our economy
while enabling those who fly under the radar to prosper.
They say power corrupts. Our powers are so corrupted and so bent they would find it hard to hide behind a corkscrew!
Nonetheless they continue to rob and deceive at every twist and turn. Money is their God.
Poverty, homelessness and suicide is a price worth paying to fulfill their obsessions.
What i can not, ever forgive, is the institutions that meter out the ill treatment on behalf of their crazed masters, the likes of the DWP.
Have the staff no compassion, do they not understand the depths of depravity that is being used against the weakest in our society…..
Its so easy to hide behind a brown envelope that will bring abject misery to many, but its still you who are pulling the trigger!
I do not hate this coalition government, it goes way beyond hate….
In fact there is probably not any word that describes how i feel about them….
What i do know, and gather satisfaction from, is the thought that this feeling is shared by so many….
We all know the cause….
Hopefully, the remedy may be within our grasp…
……the new girl in the D W P pointed at a piece of paper on the office wall and asked, “is that the head office phone number?”. “No its not” came the reply from the manager wearing jackboots, “its the total number of people we have driven into poverty today”.
The new girl looked so disappointed, “surely we can hurt more tomorrow?”.