Issue - meetings

Council Tax Reduction New Income-Banded Scheme

Meeting: 15/01/2020 - Council (Item 93)

93 Council Tax Reduction New Income-Banded Scheme pdf icon PDF 377 KB

(NOTE: A copy of the report that was considered by the Strategy and Resources Committee on 2nd December 2019 is attached).

Additional documents:


Council considered the Council Tax Reduction New Income-Banded Scheme report to the Strategy and Resources Committee on 2nd December 2019 (circulated previously).  

Meeting: 02/12/2019 - Strategy and Resources Committee (Item 72)

72 Council Tax Reduction New Income-Banded Scheme pdf icon PDF 377 KB

Report by Head of Resources (attached).

Additional documents:


The Committee considered a report by the Head of Resources (circulated previously) regarding the Council Tax Reduction New Income-Banded Scheme.

The Accountancy Services Manager highlighted the following:


·         The ‘old’ Council Tax Benefit scheme was replaced in 2013 by a new localised Council Tax Reduction Scheme.

·         Each year the scheme was reviewed and the Devon Steering Group (of Benefits Officers) work together on reviewing the schemes; over recent years there have been some minor changes to bring the scheme in line with changes made by Central Government in Housing Benefit and Universal Credit.

·         The ‘current’ scheme had been reviewed and Devon Authorities have aimed to move to a “new discount based income-banded scheme” that was fairer, simpler and reduce administration costs.

·         This reduced administration burden would enable the team to focus resource onto overall Council tax debt recovery and improve the overall collection rates.

·         Previously Council Tax Reduction (CTR) was assessed and awarded in line with Housing Benefit (HB).  The advantages of this alignment had been lost since the roll out of Universal Credit (UC) in July 2018.

·         UC was highly reactive to change and the Council can typically receive monthly notifications from the Department of Works and Pensions of a change in income (often very small sums) as the CTR scheme was fully means tested.  Even a trivial change such as this would result in reassessment, requiring an amended Council Tax bill to be produced and rescheduling instalment plans, restarting the debt recovery process all over again. 

·         Households were often issued with many bills, frequent change of instalments/direct debits and was extremely confusing for them and difficult for them to budget or understand exactly what was due to pay.  These continual set-backs for customers, who were already on low income then were often required to owe a lump sum at the end of the year due to these constant changes

·         For these reasons and to minimise the number of changes to CTR assessment Councils across the Country are starting to move towards a discount based income-banded scheme, which was simpler and cheaper to administer.

·         South Hams and West Devon introduced an income-banded scheme for the current year April 2019 and the Devon Benefits Officer Group was recommending that the other Local Authorities follow suit for 2020/21.

·         Introducing the income banded scheme based on current caseload would result in over 80% of claimants ending up better off.

·         Consultation on the proposals was undertaken from September until October 2019 via press releases, on the Council’s website, social media, direct mailshots within council tax bills and benefit notifications and advertising within our Council offices.

·         Responses to these consultations were detailed within Appendices D and Appendix E.  The response level to the consultation was relatively low however the majority of those responses were in favour of the proposed changes.

·         Before CTR the old Council Tax Benefit Scheme cost the public purse around £7.5million.

·         The first year of the CTR scheme was estimated to reduce this cost to £6.5million; however the actual scheme costs have  ...  view the full minutes text for item 72