Decision details

Purpose of Report

To propose options for consultation on a 2022/23 Council Tax Support scheme, and an accompanying Exceptional Hardship Payments scheme.

Decision

(1)         That the potential options for a Council Tax Support scheme for 2022/23 (as detailed in Section 5 of the report to the Executive) be approved for public consultation and scrutiny. 

(2)         That public consultation and scrutiny be approved on an Exceptional Hardship Payments scheme fund of £25,000 for 2022/23 (which would represent an increase of £5,000), to augment the Council Tax Support scheme awards, and which would be funded through the Collection Fund.

(3)         That a public consultation on the proposals in (1) and (2) above begin on 27 October 2021 and conclude on 8 December 2021, and include members of the public, appropriate organisations and the major precepting authorities; and the Policy Scrutiny Committee on 23 November 2021.

Alternative Options Considered and Rejected

As set out in Section 5 of the report to the Executive, three options for a Council Tax Support scheme would be subject to public consultation and scrutiny:

• Option 1: No change to the current scheme.
• Option 2: ‘All working age’ banded scheme (as detailed in paragraph 5.6 of the report).
• Option 3: ‘De Minimis’ scheme (as detailed in paragraph 5.7 of the report).

There would be public consultation on the Exceptional Hardship Payments Scheme, as detailed in paragraph 5.9 of the report. 

The outcome of the public consultation would be considered by the Executive on 4 January 2022 and the proposed 2022/23 scheme would require a decision by the Council.

Reasons for the Decision

The Council Tax Support Scheme (CTS), which replaced the national Council Tax Benefit system on 1 April 2014, may be determined by each billing authority, after consultation with precepting authorities, key stakeholders and residents.

As at the end of August 2021, there were 8,870 residents claiming CTS in Lincoln, of whom 2,704 were pensioners who were protected under the CTS.  There was discretion to determine the level of support to the remaining 6,166 working age claimants where a decision by the Council would be required to apply the CTS to non-vulnerable working age adults.  Historically CTS would be applied to vulnerable working-age adults, which included people in receipt of certain disability premia, a war pension or the Employment and Support Allowance.  

The current, 2021/22 scheme had the following features for working age adults:

• a capital limit £6,000;
• a minimum entitlement of £2 per week;
• property banding capped at band B, so that a customer residing in a band C and above property, would only have their CTS calculated on band B liability;
• backdating restricted to one month; and
• any temporary absence from home was in line with Housing Benefit regulations.

Modelling for each of the proposed Council Tax Support Scheme options had been based on assumptions such as the freeze on social security benefits, based on current national policy; Council Tax increases of between 1.9% and 2.5%; an increase in caseload for 2022/23 of no more than 5%; and a collection rate of 98.75%.

The Exceptional Hardship Payments (EHP) provided a further financial contribution where an applicant was in receipt of CTS, but the level of support did not meet their full Council Tax liability.  The Council was required to provide financial assistance to the most vulnerable residents, who have been disproportionately affected by the changes made in 2021 to the CTS. 

Since April 2013, the Council had operated an EHP scheme each year, to provide a safety net for those in receipt of CTS, who were experiencing difficulty paying their Council Tax.  The current EHP budget was £20,000 and the cost of EHP is borne solely by City of Lincoln.  As at 31 August 2021, a total of £9,070 of EHP had been awarded for 2021/22.  The government-funded Council Tax Hardship Scheme, available in 2020/21 and 2021/22, was not expected to be available in 2022/23.  It was therefore agreed that the proposed EHP budget be increased from £20,000 to £25,000 for 2022/23.