From April the UK’s Council Tax system will undergo changes. One of these changes will be Council Tax Benefit being replaced by Council Tax Reduction Schemes.

The new Council Tax Reduction Schemes are being introduced by the Government but will be run by local authorities. Essentially the new schemes will be replacing Council Tax Benefit, which is being scrapped as part of the Government’s Welfare Reform.

The specifics of Council Tax Reduction Schemes will vary between councils, but the overall aim of each scheme is said to be to support residents considered to be in financial need. The reality of this aim is being questioned by many though as, when the new schemes come into effect, low income families, who previously had all their Council Tax paid through the benefits system, will have to find, on average, £247 a year, to pay their Council Tax bill.

The changes will see many people who have previously been exempt from Council Tax, having to start paying. It is expected that many residents will struggle to, or refuse to, pay their Council Tax bills. Currently if a person does not pay Council Tax that is owed by them, councils actively pursue the debt and, if letters requesting payment go unanswered, they will take the matter to court. It is usual in these cases that the courts will arrange for any arrears to be paid through deductions from wages or directly from benefits.

With so many people expected to dismiss their new Council Tax bills when they arrive though, councils may well struggle to recover the money that is owed. Although the increase in Council Tax charges will have a big impact on individual families, the actual increase per household will only be a few pounds a week. It is likely that the cost to the council to try and recover these kinds of debts will be much greater than the amount they eventually collect.

It will be up to individual councils to decide if and how they will pursue any debts that may arise as a result of the Council Tax Reduction Schemes and they are within their rights to take non paying residents to court and demand payment.