New postcode lottery klaxon- this time for Council Tax Benefit. Oh the irony.
We’ve already heard about how the changes to Tax Credits and Child Benefit have adversely impacted on the long-suffering British population, but in their never-ending quest to save money the Government have come up with a new way to screw over those with the least money inspire people back into work. By limiting Council Tax benefit.
Currently, if you have to pay Council Tax, you can claim Council Tax Benefit as long as your capital and income are low enough. If you live with your partner, only one of you can claim Council Tax Benefit and your income and capital will be assessed together- whether you are living together as a couple, are married or are in a civil partnership.
If you get Income Support, income-based Jobseeker’s Allowance, income-related ESA or the guarantee credit of Pension Credit, Council Tax Benefit will cover the whole bill, but provided you have capital (savings or property) worth less than £16,000 and a low income, you should be able to get some help. The amount of Council Tax Benefit you get or whether your income is too high depends on your circumstances, for example, whether you have a partner or children, or whether you are disabled or care for a disabled person.
At the moment, the benefit is administered by your local council, but every month they send a bill to the Government for the amount of benefit they are due to pay out. The coalition have now decided they do not like this “endless pot of money” arrangement and are looking to save 10% of the £4.8 billion bill.
The plan, which is outlined in a new consultation document, is to devolve the payment of Council Tax Benefit to individual councils, with Government funding limited by a (smaller) cap. This means that councils will have to find other ways of saving money if they are to meet the current demand of the 5.8 million Council Tax Benefit claimants.
But more scary is the suggestion that councils will then also be free to change the eligibility criteria, effectively instigating a postcode lottery where someone in the next town could have a higher income, but get higher benefit too.
The 11-week consultation is now under way, and will be followed by the Local Government Finance bill, which is expected to be published in the autumn.
Communities and Local Government Secretary Eric Pickles said: "The new system will be a fairer one, where hard working families and pensioners are not left to pick up a spiralling benefits bill and where hard work always pays." Uh-huh.
Still, with all the money George will save, perhaps he can cut the 50% rate for all those poor high-earners...