An estimated 1,400 low-income households in the Vale of White Horse district will be lifted out of paying council tax from April next year.
Councillors at Vale of White Horse District Council this week unanimously agreed to provide extra support following a review of the authority’s council tax reduction scheme, which has been in place since 2014.
The main change is the scrapping of a cap to the support for working-age people who are not disabled or in receipt of Employment Support Allowance, which is paid to those whose disabilities or health conditions affect how much they can work.
The 91.5 per cent limit currently in place means those on low incomes have to pay a minimum of 8.5 per cent of their overall council tax bill, but, depending on eligibility, there will be scope for those claimants to pay nothing from April 2023.
An extension to the 25 per cent discount for properties with one adult has also been agreed upon. Currently, households with a second adult who is not liable for council tax cannot benefit from the 25 per cent reduction, but that will also change in April.
Households in the top three bands that receive council tax support have been downgraded to band E since 2014. That will also be scrapped, but as with other claimants, they can get up to 100 per cent of their bills covered subject to eligibility.
None of the changes affects pension-age residents whose council tax support is determined by the national government.
Council officers recommended the changes in its report to councillors.
It read: “Council tax collection data indicates that the current minimum charge of 8.5 per cent and band E restriction causes hardship for working individuals and families.
“Considering the current cost of living crisis and the cost to collect the potential shortfall, this change should help reduce potential hardship that this minimum charge could bring them and their children.”
Estimates show the changes are expected to lead to around £190,000 less council tax being collected, but Oxfordshire County Council will be affected the most because it receives a sizeable chunk of the revenue.
The cost to the county is expected to be just shy of £150,000. Thames Valley Police misses out on approximately £21,000, with Vale of White Horse District Council ceding around £13,000.
Councillor Andy Crawford (Lib Dem, Wantage Charlton), Vale of White Horse District Council’s cabinet member for finance and corporate assets, said: “In view of the current cost of living crisis, this 8.5 per cent charge has proved increasingly difficult for many low-income households to afford.
“These debts can quickly spiral, especially when enforcement fees occur and get added to their balances, fees that would be higher than the initial amount due.”
He said the plan would cut administrative costs by preventing “numerous, low-value recovery notices” from being issued and argued that the financial cost would be outweighed by offering “further valuable support to 1,400 households in the Vale, saving them on average £130 per annum”.
Councillor Hayleigh Gascoigne (Lib Dem, Blewbury and Harwell) added: “It will have a real effect on our residents.
“This was first suggested in a motion that was brought to the council back in July. I spoke in favour of that, particularly as it makes sense for lower-income households to pay zero rather than just that small percentage.
“It doesn’t make much difference to us, but it makes a huge difference to those people if we are sending them letters, hassling them – why add the stress of another bill?
“I really feel strongly that reducing it to zero is a good idea. Looking at the paper, the scheme has clearly been thought through. A lot of work has gone into this, and there are some other additions, so I am really pleased to see this.”
Under the current scheme, the calculation of working age Council Tax Reduction was based on 91.5 per cent of a household’s Council Tax liability rather than 100 per cent.
There are exemptions to this. These were for applicants considered disabled, receiving War Widows Pensions, War Disablement Pensions or a single parent with a child under 5 years old.
To be considered disabled, the applicant had to receive one of the following in their Council Tax Reduction award:
- Disability premium
- Enhanced disability premium
- Severe disability premium
- A disability premium for dependants
- Enhanced disability premium for dependants
- Disabled earnings disregard
- A Council Tax disability reduction
- In receipt of Employment Support Allowance at any rate.
An applicant liable for Council Tax who lives with another adult who is not liable does not receive a single-person discount. Under the Second Adult Rebate, if that other adult’s income is below a certain amount, the applicant can receive help with their Council Tax based on the other adult’s income, regardless of the applicant’s income.
Councillor Andy Crawford, the Cabinet Member for Finance and Corporate Assets at Vale of White Horse District Council, said: “The cost-of-living crisis is having a very real impact on many families who are fearful of how they will be able to afford to eat or pay utility bills.
“We hope that the measures we’ve agreed will help to relieve some of the burden that those most at risk are facing. Where possible, it’s important that everyone contributes to help pay for public services. However, we will continue to do what we can to help those across the district who are experiencing severe financial hardship.”