Council Tax Rise

Council tax raise could be on the cards for millions of low income families

It is thought that most councils in England will raise council tax as they have their budget for this area cut by 10 per cent. The hike in council tax prices will hit low income families particularly hard as the council tax benefit system is also set to be scrapped in April.

Research by the Resolution Foundation, an independent research group, which says its goal is to improve outcomes for people on low and modest incomes, has suggested that a typical bill will rise by between £100 and £250 a year. The research has also shown that some council tax bills could increase by as much as £600.

Council tax is not set to rise in Wales where the funding cut is being absorbed by the government rather than being passed on to local authorities. In Scotland it is reported that the cost of any cuts will be shared between councils and the Scottish government ensuring support is maintained for low income families.

The 326 councils in England, however, are expected to take on all responsibility for taking on the support provided currently by council tax benefit and most of these councils report that they will be left with a shortfall if they try to maintain the level of existing payments.

While some councils are making savings elsewhere in their budgets, in order to protect the incomes of the poorest households, others are not but are rather pledging that they will take the incentive to help people off benefits and into work.

Council tax benefit is currently claimed by about five million households in England and about half of these households receive 100% support, meaning they currently pay no council tax at all. Government ministers have declared that a benefit reform is vital to tackle the budget deficit and state that the total paid out in council tax benefit doubled under the last government.

The government has however put forward £100m of support for those councils who choose to limit the council tax increase for those on low income to 8.5%.

Despite this the Resolution Foundation says that their research has shown three-quarters of authorities in England are planning to demand a new or higher payment for council tax from the lowest income households.

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