West Northamptonshire Council Local Council Tax Reduction Scheme (LCTRS) Consultation 2021-22

Closes 13 Dec 2020

Opened 2 Nov 2020

Overview

Background

The Local Council Tax Reduction Scheme (sometimes known as Council Tax Support) helps people on low income pay their Council Tax.Those of pensioner age are protected by the prescribed regulations set out by central government.

Local Council Tax Reduction Schemes (LCTRS) were introduced from April 2013 when Council Tax Benefit was abolished and replaced by locally agreed schemes.

By law, Councils are required to have a scheme to help people on low incomes to pay their Council Tax. Each year Councils needs to approve a LCTRS for the following 12 months. Where there are changes proposed, it is necessary for a public consultation to take place.

Why do we need to change?

The current two-tier system of local government in Northamptonshire is changing from 1st April 2021.

On 1st April 2021 there will be a new council called West Northamptonshire, replacing the County Council, Northampton Borough Council, Daventry District Council and South Northamptonshire Council.

Currently in Northamptonshire, each District or Borough Council has a different LCTRS that give different levels of Council Tax Support for working age people. The introduction of the new unitary Council means that the current LCTRS will cease and a new scheme will need to be agreed.

From April 2021 we want the new West Northamptonshire Council to have LCTRS, which is affordable, consistent and fair to all our residents, wherever they live.

What is this consultation about?

The four existing Councils have been working together on draft proposals for a new West Northamptonshire Council. The proposals contained in this consultation apply to people of working age who are on low income and currently reside in Daventry District, Northampton Borough or South Northants District council areas.

We are keen to ensure that all Council Taxpayers are aware of the changes being proposed.

We want the views of our residents and other stakeholders on the scheme that is being proposed for the new council.

Our proposal for Local Council Tax Reduction Scheme 2021-2022

We want a fair and equal scheme that provides people with help with their Council Tax payments no matter where they live in West Northants.

To do this we need to bring together the current schemes for each of the district and borough councils into one single scheme for the new West Northamptonshire Council from April 2021.

The challenge we have is to balance the desire to support residents who need financial help with the cost of any scheme to all Council Taxpayers.

How do we propose to do this?

Each of the current councils have a different scheme for working age people.

These are our proposals for how the Local Council Tax Reduction Schemes could be brought into a single scheme from 1st April 2021.    

1. Level of contribution for working age: the current councils have different levels of minimum Council Tax contribution that working age claimants must pay ranging from a minimum of 8.5% to a maximum of 31% of Council Tax.

  • Our proposal is to harmonise the minimum contribution to 26.5% of Council Tax liability for working age people.
  • Rationale: The three councils currently have different levels of minimum Council Tax contribution that working age people must pay ranging from 8.5% to 31%. Our proposal means that going forward working age must pay a minimum of 26.5% of their Council Tax liability and will ensure that the Local Council Tax Reduction Scheme is broadly cost neutral to the new authority and, therefore, in overall terms there will be no additional financial burden on the wider taxpayer.
  • It should be noted that this proposal will see greater support given to working age claimants in Northampton Borough and less support given to working age claimants in South Northants and Daventry districts compared to current levels of support.

2. War Widows and War Disablement: the three districts currently disregard 100% of War Pension income under local schemes. This has a beneficial impact on customers and the support they receive.

  • Our proposal is to continue to protect this group and to disregard 100% of the income from War Pensions.
  • Rationale: This means that we can continue to offer support to those residents receiving war pensions at relatively small costs to the taxpayer. 

 3. Family Premium:

  • Our proposal is to remove the award of a family premium when assessing new claims for LCTRS.
  • Rationale: One of the Councils continues to award a Family Premium in the applicable amounts when assessing new claims for LCTRS. The proposal would align the differences in the existing districts and borough’s LCTRS and would create one scheme for West Northamptonshire. The removal of the family premium will provide less support to some new LCTRS claimants but will mean a lower cost for the wider taxpayer. This is also in line with the Department for Work and Pensions (DWP) Regulations.
  • Click here for further information about this proposal.

4. Child allowance in the calculation of LCTRS:

  • Our proposal is to limit the child allowance to two children when assessing new claims for LCTRS in line with DWP Regulations.
  • Rationale: Changes under the wider reform agenda limit the child allowance used in applicable amounts to a maximum of two children. Two of the Councils have already introduced this change. The proposal would align the differences in the existing district and borough’s LCTRS and would create one scheme for West Northamptonshire which is affordable, consistent and fair to all our residents wherever they live.The restriction of the child allowance to two children will mean less support to some new LCTRS claimants but will reduce costs to the wider taxpayer. 
  • Click here for further information about this proposal.

5. Minimum self-employed income:

  • Our proposal is to apply a minimum value to the income of those people who are self-employed when assessing LCTRS.
  • Rationale: Two of the Councils do not currently apply a minimum income to self-employed. The proposal would align the differences in the existing district and borough’s LCTRS and would create one scheme for West NorthamptonshireThis means that all LCTRS claimants who have a self-employed income and currently declare no income will have a minimum income figure included in their LCTRS assessment. 

6. Non dependant deductions:

  • Our proposal is to harmonise the rates of non-dependant deduction to the prescribed amounts set by Government.
  • Rationale: where an adult friend or family member resides with a claimant, LCTRS is reduced by a set amount based normally on the prescribed amounts on the weekly income of the non-dependant. One of the Councils currently has slightly higher rates of deduction. This proposal would align the differences in the existing district and borough’s LCTRS and would create one scheme for West Northamptonshire.

Other options considered but discarded:

A number of options have been considered when developing our proposals for the new scheme. For further information, including details of the discounted options and the associated impacts, please see the below:

The consultation

We know that by creating one scheme for the new council, working age claimants of council tax support will be affected.  It is important that we continue to support those who need financial help at the same time as offering an affordable scheme for all our Council Taxpayers.

We would really like your views on our proposals for a new LCTRS. The consultation is open to all residents, stakeholders and people representing organisations

The consultation  will run for six weeks from 2nd November 2020 to 13th December 2020.

Please tell us your views by completing this consultation questionnaire. Alternatively, you can email or send your comments in by post.

The information provided by you in this survey will be used only for research purposes and it will not be used in a manner that would allow identification of individual responses.

Please contact us if you have any queries about this consultation or if you require it in another format or language. Our contact details are as follows:

Email address: futurenorthants@northamptonshire.gov.uk

Telephone: 01604 837355

What will happen next?

Once the consultation closes, we will collate all the feedback received and present this information to the West Northamptonshire Shadow Executive to consider when making their decision on how to harmonise the Local Council Tax Reduction Scheme for West Northamptonshire. We will then publish full details of the new scheme in early 2021, with the changes coming into effect in April 2021

Give Us Your Views