Council Tax support scheme

Proposed Scheme for 2025-26

The Council tax benefits system was abolished by central government. Local Authorities then created their own Council Tax Support schemes based on needs and priorities from 1 April 2013.

North Kesteven District Council is currently looking at the Council Tax Support scheme for 2025-26. However, before we decide on our final scheme, we are consulting with our residents and any other person/organisation who might have an interest in our scheme.

The consultation period starts on 7 October 2024 and will end on 18 November 2024.

A decision about the final scheme will be made by the Councillors to the authority when they meet in January 2025. As soon as possible after this date, full details of our scheme will be published on our website.

We would like your views, whether you receive Council Tax Support or not to ensure that we make an informed decision.

We will briefly explain the current scheme below and how that works. We will then explain the new banded scheme that we are considering and why we are considering making the changes.

What we’re asking

Council Tax Support is awarded to approximately 2704 pensioner households and 2705 working age households. This equates to about 9.8% of the total households in the North Kesteven area (figures at 30 June 2024).

We want your views on whether we stay with the current scheme or whether we move to a banded scheme. Please note that only working age households will be affected by these changes.

This affects just over 2700 households at present, but this could increase or decrease over the year.

Pensioners are not affected by these proposals.

Pensioner means someone who has reached the age at which one typically receives a state pension. This is currently 66 years old. This is scheduled to rise to 67 from 6 May 2026.  This is set to rise again to 68, between 2044 and 2046.

You can check your state pension age online at GOV.UK.

Current Council Tax Support Scheme

The current scheme for 2024/25 has the following restrictions for working age customers

• Capital is limited to £8000 – over this amount and you do not receive any Council Tax Support.
• Minimum entitlement is £3.50 per week – unless your income shows you would be entitled to £3.50 a week or more, you will not receive Council Tax Support.
• Property banding is capped at 90% of a Band D – a customer in Band E and above will only have their Council Tax Support calculated as 90% of the Band D liability at the most.
• Backdating is restricted to 1 month since 1 April 2018.
• Self-employed income is assessed using 16 hours at minimum wage for the first year of business.
• All child maintenance is disregarding.
• Temporary absence away from home is in line with the Housing Benefit regulations.
• Care leavers are fully exempt from council tax up to the age of 25 years.
• Premium charges apply to properties that have been empty for more than 1 year, 5 years and 10 years.
• An exceptional hardship fund of £25,000.

The scheme above has some minor differences for vulnerable working age customers.

Even a very small change in Universal Credit means that under the current scheme, there would be a change in Council Tax Support. The change in Council Tax Support results in new council tax bill being issued, potentially with a new payment plan which can cause changes to the direct debits etc. Our residents can find that they are getting multiple changes to their payment plan throughout the year which results in confusion and at times large bills that need to be paid towards the end of the year.

Our banded scheme which is explained below will reduce the number of times the Council Tax Support changes as most of the small changes will stay within specific income band widths. New bills would only be issued if the income changes meant that the income moved into a different band.

Banded scheme

All our working age residents will be included in the banded scheme.

The banded scheme will be based on income. The scheme will include our vulnerable customers but some of the benefits relating to their vulnerability such as disability payments, war pensions, disabled child premium etc will be ignored for the purposes of this scheme. A full list of these will be available as the scheme is progressed but will be available by January 2025 for Councillors to consider.

Income will be calculated, and the household placed into a ‘band’ as shown in the table below. The majority of small changes to income should not result in a band change or a change to the Council Tax Support. This will reduce the number of changes made over the year and customers will have a better understanding of how much council tax they must pay during the year and should not be caught out by large bills that they suddenly must pay.

Changes that we are making may include;

1. Removing the Band D cap.
2. Increase the capital limit from £8000 to £16000, to bring this in line with Universal Credit.
3. Removal of the minimum award.
4. Removal of the second adult rebate.
5. Considering increasing the 1 month backdate to 3 months.
6. Introduce a flat rate non-dependant deduction.

Income Bands

These income bands are still being worked on and these figures may change. We are currently testing how these changes will affect our residents.

Why we want to change things

We want to make it easier for people to receive what they should, to understand what they are getting and what Council Tax they must pay.

Council Tax Support is separate from Universal Credit. It must be claimed from the Council. We want to link this more closely to Universal Credit so that for most claims, we have the information we need directly from the DWP. In these cases, we hope to be able to put your claim in place without having to ask you to provide the same evidence that you have already provided to the DWP.

These changes are not being considered so that we reduce the amount of Council Tax Support people get. We want to make it simpler for you to claim and easier for us to administer.  As with changes to any scheme, there may be some winners and losers, but we expect the overall cost to the council to be about the same as now.

Previous Year's Schemes