Council Tax Support scheme consultation
We are proposing to make some changes to Islington's Council Tax Support scheme for 2024/25 and we would like your feedback. The reasons for the proposed changes are to simplify the scheme and to provide support to households most in need.
The Council Tax Support scheme is a local scheme that provides help to working age residents on low incomes to pay their Council Tax. The scheme was first introduced in 1 April 2013.
The Council Tax Support award for pensioners is set by the Government and they are not affected by the council's working age scheme.
Current scheme
The current Council Tax Support scheme is providing over £33m of support to our lowest-income households in 2023/24. We project that this support will increase to over £35m in 2024/25, both if we continue with the current scheme or any of the three options that we have outlined below. This support is vital help for households, so this consultation is about how we best utilise this support to help households most in need with their council tax costs.
The current Council Tax Support scheme provides a maximum of 95% discount to working age households.
What we are proposing to change
We are proposing to introduce a banded scheme so that the Council Tax Support entitlement is based on financial circumstances of the applicant and their partner if they have one, also taking into account the number of children or dependents they have.
The proposals set out for consultation put forward three different models that will provide a maximum of 100% support to the most vulnerable households who have barriers preventing them from moving into employment.
Why are we proposing changes?
We are proposing to bring in a simplified banded Council Tax Support scheme because:
- the existing scheme is based on a complex calculation of entitlement, so it will make it easier for residents to understand
- it will make it easier for council staff to administer and will reduce processing times for claims
- it reduces the frequency of changes in entitlement for those residents on Universal Credit (UC) who due to changes to their working situation, may have small changes to their income each month. At the moment, an average of 40% of residents are seeing eight to 12 changes in entitlement a year as their financial circumstances change, which contributes to additional administrative burdens and processing delays. With a banded scheme, it will only impact on the support entitlement if the change is significant enough to change the band they fall within.
Income banded schemes have already been adopted by other London boroughs including, Camden, Barnet, Sutton, Brent and Enfield.
We are putting forward three possible options for the introduction of a banded scheme based on income for consultation. The details on the three models are set out below.
Key features of the new scheme
- All three models offer a banded scheme based on financial circumstances offering up to a 100% discount for passported households. Passported households means those on legacy benefits receiving Personal Independence Payment or Disability Living Allowance, on Universal Credit (UC) with limited capability for work and single parents with zero earnings with a child under five years.
- Jobseeker households that have zero earnings, in receipt of UC with no earnings, or in receipt of Jobseekers Allowance will receive 95% discount.
- Households working will be placed into the band in which their net earnings fall. Net earnings are calculated as gross income less Tax, National Insurance Contributions and 100% pension contributions.
- A non-dependant deduction of £7.50 will be taken off the Council Tax Support award for every adult over 18 in the household.
Model one
For this banded model all passported households will be placed into Band 1, all jobseeker households will be placed into band 2 and working households will be placed into the band in which their net earnings fall - band 3-7.
| Weekly earnings | ||||||
Band | Single with no children | Single with one child / Couple with no children | Single with two children or more | Couple with one child | Couple with two children or more | Discount |
1 | Passported | Passported | Passported | Passported | Passported | 100% |
2 | £0 | £0 | £0 | £0 | £0 | 95% |
3 | £1-£25 | £1-£50 | £1-£50 | £1-£75 | £1-£75 | 90% |
4 | £25.01-£80 | £50.01-£120 | £50.01-£160 | £75.01-£160 | £75.01-£200 | 75% |
5 | £80.01-£120 | £120.01-£160 | £160.01-£200 | £160.01-£200 | £200.01-£240 | 60% |
6 | £120.01-£160 | £160.01-£200 | £200.01-£240 | £200.01-£240 | £240.01-£280 | 40% |
7 | £160.01-£200 | £200.01-£240 | £240.01-£280 | £240.01-£280 | £280.01-£320 | 20% |
Examples
Couple with net earnings of £40 per week
If you are a couple with no children earning £40 a week between you, you will be placed in band 3 and receive a 90% discount. The maximum you can earn per week is £50 before you will move bands.
Couple with one child and net earnings of £40 per week
If you are a couple with one child earning £40 a week between you, you will be placed into band 3 and receive a 90% discount. The maximum you can earn per week is £75 before you will move bands.
Model two
For this banded model earnings override passported household status, so those passported households that are working will be placed into band 3-7 that their earnings fall.
Passported households not working will be placed into Band 1, all jobseeker households will be placed into band 2 and working households will be placed into the band in which their net earnings fall - band 3-7.
| Weekly earnings | ||||||
Band | Single with no children | Single with one child / Couple with no children | Single with two children or more | Couple with one child | Couple with two children or more | Discount |
1 | Passported, not working | Passported, not working | Passported, not working | Passported, not working | Passported, not working | 100% |
2 | £0 | £0 | £0 | £0 | £0 | 95% |
3 | £1-£25 | £1-£50 | £1-£50 | £1-£75 | £1-£75 | 90% |
4 | £25.01-£80 | £50.01-£120 | £50.01-£160 | £75.01-£160 | £75.01-£200 | 75% |
5 | £80.01-£120 | £120.01-£160 | £160.01-£200 | £160.01-£200 | £200.01-£240 | 60% |
6 | £120.01-£160 | £160.01-£200 | £200.01-£240 | £200.01-£240 | £240.01-£280 | 40% |
7 | £160.01-£200 | £200.01-£240 | £240.01-£280 | £240.01-£280 | £280.01-£320 | 20% |
Examples
Couple with net earnings of £40 a week
If you are a couple with no children earning £40 a week between you, you will be placed in band 3 and receive a 90% discount. The maximum you can earn per week is £50 before you will move bands.
Couple with one child and earning £40 per week
If you are a couple with one child earning £40 a week between you, you will be placed into band 3 and receive a 90% discount. The maximum you can earn per week is £75 before you will move bands.
Model three
For this banded model earnings override passported household status, so those passported households that are working will be placed into band 3-7 that their earnings fall.
Passported households not working will be placed into Band 1, all jobseeker households will be placed into band 2 and working households will be placed into the band in which their net earnings fall - band 3-7.
There will be no non-dependant deduction for those non-dependants who are in receipt of Income Support, income-based Jobseekers Allowance, income-related Employment Support Allowance, Universal Credit with no earnings or Pension Credit Guarantee Credit.
| Weekly earnings | |||||
Band | Single with no children | Single with one child / | Single with two children or more / Couple with one child | Couple with two children or more | Discount |
1 | Passported, not working | Passported, not working | Passported, not working | Passported, not working | 100% |
2 | £0 | £0 | £0 | £0 | 95% |
3 | £1-£25 | £1-£65 | £1-£105 | £1-£145 | 85% |
4 | £25.01-£80 | £65.01-£120 | £105.01-£160 | £145.01-£200 | 75% |
5 | £80.01-£120 | £120.01-£160 | £160.01-£200 | £200.01-£240 | 65% |
6 | £120.01-£160 | £160.01-£200 | £200.01-£240 | £240.01-£280 | 50% |
7 | £160.01-£200 | £200.01-£240 | £240.01-£280 | £280.01-£320 | 35% |
Examples
Couple with net earnings of £40 per week
If you are a couple with no children earning £40 a week between you, you will be placed in band 3 and receive an 85% discount. The maximum you can earn per week is £65 before you will move bands.
Couple with one child and net earnings of £40 per week
If you are a couple with one child earning £40 a week between you, you will be placed into band 3 and receive an 85% discount. The maximum you can earn per week is £105 before you will move bands.
