Council approves increase in Council Tax support for low earners
Councillors have approved proposals to increase the amount of support available to Hackney residents struggling to pay their Council Tax.
The changes mean that those on low incomes, who qualify for Hackney’s Council Tax Reduction Scheme (CTRS), will get up to 85% of their Council Tax paid if they are of working age - up from 83%.
Pensioners and young people leaving care will continue to get 100% of their Council Tax paid.
The move was approved at a Full Council meeting on 22 January. If followed a consultation at the end of last year, when over 73% of respondents said they were in favour of the changes.
The proposals were developed after a series of Government announcements last year, which suggested they expect councils to increase Council Tax to the maximum level each year, rather than rely on central funding. The Council had previously committed to regularly review its CTRS, to ensure the borough’s poorest residents are not disproportionately affected by Council Tax increases.
The Government handed responsibility for administering Council Tax Benefit - with a significant reduction in funding to councils in 2013. Hackney Council currently invests £25m - the same as its entire Children and Families Services budget - into the CTRS to help over 27,000 working age residents pay their Council Tax. Under the revised scheme, this investment will increase by a further £500,000.
Cllr Rebecca Rennison, Cabinet Member for Finance and Housing Needs, said: “The continuing attack on local Government finances meant we had to take the difficult decision to increase the minimum contribution for those who qualify for the Council Tax Reduction Scheme to 17% in April 2018. Alongside this, the Council decided to exempt our care leavers from Council Tax until the age of 25.
At the time of this decision, we agreed to monitor its impact and report back after two years. While the review found that the change had had a minimal impact on Council Tax collection rates or the number of people in arrears, we are mindful of the ongoing impact of welfare reform on some of our poorest residents.
Government cuts to public services, changes to benefits, and increases in everyday living costs such as food, rent, and utilities have a disproportionate impact on our poorest households, and we want to do everything we can to support them. This is why we have taken the decision to reduce the minimum Council Tax contribution to 15%. We are working on a comprehensive poverty reduction programme, and our ambition for the future is to move to a 0% contribution for our poorest residents.