Agenda item

Purpose of Report

To propose options for consultation on a 2024/25 Council Tax Support scheme, and an accompanying Exceptional Hardship Payments scheme.

Decision

(1)         That the following options for a 2024/25 Council Tax Support scheme be moved forward for public consultation and scrutiny:

·         ‘No change’ scheme, and/or

·         Banded scheme for all working age customers

(2)         That an Exceptional Hardship Fund of £25,000 or £35,000 in 2024/25 be approved.

Alternative Options Considered and Rejected

As set out in Section 5 of the report to the Executive, two 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: Introduction of a ‘banded scheme’ for all working age customers.

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 30 June 2023, there were 8,458 residents claiming CTS in Lincoln, of whom 2,591 were pensioners protected under the CTS. There was discretion to determine the level of support to the remaining 5,867 working age claimants (including those classified as ‘vulnerable’ for CTS purposes) in a local scheme which could change the level of support provided.

Unless a decision by the Council was made to apply scheme changes to vulnerable working-age customers, the localised CTS scheme would historically only be applied to non-vulnerable working age customers. The definition of vulnerable working-age customers was clarified within the officer’s report.

The current, 2023/24 scheme contained the following restrictions for working age customers:

• Capital limit £6,000;
• 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
• Temporary absence from home in line with Housing Benefit regulations.

Based on the current core elements of the existing scheme, caseload increases of 0% and 5% had been modelled, along with Council Tax increases of 1.9% and 2.9%. These were summarised at Appendix 1 of the officer’s report, giving an indication of the potential cost and savings to City of Lincoln Council. Also included was the potential value for non-collection, based on the collection figure currently included in the MTFS (98.75%).

As a billing authority the Council could decide whether or not to amend core elements of its scheme each year. Proposed options for consultation were included in Appendix 1 of the officers report.

For 2024/25, an option was put forward for consideration to make a fundamental change to the way CTS was calculated for working age customers, as detailed at paragraph 5.6 of the officers report

This could be a more streamlined, efficient, and easier to understand scheme based on specified income bands and percentage awards.

Exceptional Hardship Payments (EHP) assisted persons who had applied for CTS and faced ‘exceptional hardship’ – it was similar to the Discretionary Housing Payment scheme (DHP) for Housing Benefit shortfalls. EHP provided a further financial contribution where an applicant was in receipt of CTS but the level of support being paid by the Council did not meet their full Council Tax liability. The Council was required to provide financial assistance to the most vulnerable residents, who had been disproportionately affected by the changes made in 2023 to the CTS Scheme.

Since April 2013, the Council had agreed to introduce an EHP scheme each year, in order to provide a safety net for customers, in receipt of Council Tax Support who were experiencing difficulty paying their Council Tax. Exceptional Hardship fell within Section 13A(1) of the Local Government Finance Act 1992 and formed part of the CTS Scheme.

The cost of EHP awards was borne solely by City of Lincoln. As at the end of June 2023, a total of £7, 251.29EHP had been awarded for 2023/24. It was proposed that an EHP budget of £25,000 or £35,000 be in place for 2024/25– the increase being to try and help assist in mitigating the transition to reduced levels of award under a banded scheme, in appropriate cases. If a ‘no change’ scheme was implemented, it was proposed the EHP provision for 2024/25 remained as 2024/25 – i.e. £25,000.