Options for the Council Tax Reduction scheme
Income Bands Option 1
Option 1 takes account of both earned and benefit income
| Band | Level of Support | Single no children | Single one child | Single two+ children | Couple no children | Couple one child | Couple two+ children |
|---|---|---|---|---|---|---|---|
| Weekly Income level | |||||||
| 1 | 75% | £0 - £94 | £0 - £181 | £0 - £249 | £0 - £137 | £0 - £223 | £0 - £292 |
| 2 | 65% | £94 - £124 | £181 - £211 | £249 - £279 | £137 - £167 | £223 - £253 | £292 - £322 |
| 3 | 55% | £124 - £154 | £211 - £241 | £279 - £309 | £167 - £197 | £253 - £283 | £322 - £352 |
| 4 | 45% | £154 - £184 | £241 - £271 | £309 - £339 | £197 - £227 | £283 - £313 | £352 - £382 |
| 5 | 25% | £184 - £214 | £271 - £301 | £339 - £369 | £227 - £257 | £313 - £343 | £382 - £412 |
Income Bands Option 2
Option 2 only takes into account earned income
| Band | Level of Support | Single no children | Single one child | Single two+ children | Couple no children | Couple one child | Couple two+ children |
|---|---|---|---|---|---|---|---|
| Weekly Earned Income level | |||||||
| 1 | 70% | No earnings | |||||
| 2 | 50% | £0 - £50 | £0 - £70 | £0 - £90 | £0 - £70 | £0 - £90 | £0 - £110 |
| 3 | 30% | £50 - £80 | £70 - £100 | £90 - £120 | £70 - £100 | £90 - £120 | £110 - £140 |
| 4 | 15% | £80 - £150 | £100 - £170 | £120 - £170 | £100 - £170 | £120 - £190 | £140 - £210 |
Income Bands Option 3
Option 3 only takes into account earned income
| Band | Level of Support | Single no children | Single one child | Single two+ children | Couple no children | Couple one child | Couple two+ children |
|---|---|---|---|---|---|---|---|
| Weekly Earned Income Level | |||||||
| 1 | 75% | No earnings | |||||
| 2 | 50% | £0 - £50 | £0 - £70 | £0 - £90 | £0 - £70 | £0 - £90 | £0 - £110 |
| 3 | 30% | £50 - £80 | £70 - £100 | £90 - £120 | £70 - £100 | £90 - £120 | £110 - £140 |
| 4 | 15% | £80 - £150 | £100 - £170 | £120 - £170 | £100 - £170 | £120 - £190 | £140 - £210 |
Analysis of Council Tax Reduction options by household scenarios
| Household Type | Option 1: Current Scheme | Option 2: Earnings Only (70%) | Option 3: Earnings Only (75%) |
|---|---|---|---|
| Single person receiving Universal Credit and not working | Continues to receive support based on current rules. | Likely to receive more support because Universal Credit income is no longer included. | Likely to receive more support and could receive up to 75% support if they have no earnings. |
| Lone parent with two children receiving Universal Credit and not working | Support continues under current rules. | Likely to receive increased support because benefit income is ignored. | Likely to receive increased support and may receive slightly more than under Option 2. |
| Single person working part-time | Support based on earnings and benefits. | Could receive less support because only earnings are considered and the maximum award falls to 70%. | Could receive less support than now, although maximum support remains at 75%. |
| Couple with children where one adult works | Current assessment rules continue. | May receive less support if earnings place them in a lower discount band. | Similar to Option 2, although some households may receive slightly more support because the maximum award remains 75%. |
| Disabled resident receiving Universal Credit with an LCWRA element and not working | Current support continues. | Likely to receive significantly more support because LCWRA and other Universal Credit elements are ignored in the calculation. | Also likely to receive significantly more support because benefit income is disregarded. |
| Couple with an adult son or daughter living at home (non-dependent) | Current non-dependent deduction rules and exemptions apply. | A standard £10 weekly deduction would apply if the household is not exempt. | A £10 weekly deduction would apply to all working-age households with non-dependants, including those currently exempt. |
| Working household with moderate earnings and no benefits | Could continue to receive some support depending on income level. | May receive reduced support or lose entitlement if earnings exceed the scheme thresholds. | May receive reduced support or lose entitlement if earnings exceed the scheme thresholds. |
Non-Dependant Deductions
A non-dependent is an adult who lives with you but is not your partner. For example, this could be an adult son or daughter, a relative, or a friend living in your home.
The consultation options include changes to the way non-dependent deductions are applied when Council Tax Reduction is calculated.
| Current Scheme (Option 1) | Option 2 | Option 3 | |
|---|---|---|---|
| Non-dependent deduction | Different deduction amounts may apply depending on the non-dependent's circumstances and income. Some households are exempt. | A single flat-rate deduction of £10 per week would apply to most households with a non-dependent. Some exemptions would remain. | A single flat-rate deduction of £10 per week would apply to all working-age households with a non-dependent. Existing exemptions would be removed. |
| Simplicity | More complex | Simpler | Simplest |
| Impact on exempt households | No change | No change in most cases | May receive less support because exemptions would end |
Households exempt from non-dependant deductions in Options 1 & 2
Where Claimant / Partner is
- Blind
- Receiving
- Attendance Allowance
- Disability Living Allowance – care component
- Personal Independence Payment – daily living component
- Armed Forces Independence Payment
Where No dependant is
- On qualifying training scheme
- Full-time student
- Long term hospital patient
- Serving in Armed Forces
- Receiving Guaranteed Pension Credit
- Qualifies as a person to be a disregard for council tax purposes
- In receipt of Universal Credit and as no earned income
