This year doesn’t look good for a number of low income households who are set to lose out on council tax benefits by having to pay either some, or more than they have in the past.
This is because of the new Council Tax Support Scheme which places more responsibility on local authorities to care for those on low incomes, and less on the government.
The British government is cutting the budget subsidies given to councils by 10 per cent, and that money will have to come from somewhere. It seems that England will be badly affected, with Northern Ireland considering its options. Those in Wales and Scotland will be protected from the changes because their own governments have said they will make up the shortfall in conjunction with the councils.
Most councils have decided to reduce the council tax benefit available for residents on low incomes after central government imposed a 10 per cent cut on the total subsidy budget. At present 3.2 million working-age households receive such support.
Some councils will be able to squeeze their budgets to make sufficient savings to offset the reduction from Whitehall, but figures show that about three quarters of councils will have to collect more in Council Tax.
The only category unaffected from these changes are pensioners who are safeguarded against them.
It has been suggested that of the 2.5 million working-age jobless people on council tax benefit, who now pay no council tax, will have to find between £100 and £250 a year, and that’s a large amount for families already feeling the pinch.
All this is bad news for people who are already very close to the edge given falling wages not keeping pace with inflation, high unemployment, changes to tax credits and tougher benefit rules.
It wouldn’t be too much of a surprise to see greater levels of borrowing by people who can least afford the very high interest rates charged by payday loan companies, and the loan sharks.