Consultations - Council Tax Reduction Scheme 2020-2021: Public Consultation

Record details

Consultation starts
3 September 2019
Consultation ends
8 October 2019
Policy development

What is Council Tax Reduction?

In April 2013, the Council Tax Benefit Scheme was replaced by a new Council Tax Reduction Scheme. Council Tax Benefit had been funded by the Department for Work and Pensions and supported people on low incomes by reducing the amount of Council Tax they must pay.

The Council Tax Reduction scheme is determined locally by District Councils rather than by the Department of Work and Pensions. Funding for the local scheme is  around 10% less than under the previous Council Tax Benefit scheme which for Cherwell district is around £742,000 which is shared with the Oxfordshire County Council and the Police and Crime Commissioner.  Cherwell District Council’s share is approximately £52,000.

People can claim Council Tax Reduction if they are on low income. Cherwell District Council’s current scheme gives a maximum level of support of 100% for working age applicants depending on income and other factors. A separate Central Government scheme is retained for people of pension age. Councils are only able to vary their scheme for people of working age.

Each Council is required to review their schemes each year. Before any changes are made they must be subject to public consultation.   

What is this consultation about?

Cherwell District Council is considering moving to a new, simpler Council Tax Reduction Scheme and wants to hear your views.

Why are we looking to change the scheme?

  • The introduction of full-service Universal Credit in effect, means the traditional link between Housing Benefit and Council Tax reduction will no longer exist.
  • The current Council Tax Reduction scheme does not work effectively with the government's Universal Credit system. 
  • Residents in receipt of a Council Tax Reduction are likely to have multiple changes in their benefit throughout the year.  This means the Council must reassess a resident's entitlement to CTR an equal number of times, often with no resulting change in the amount of financial support given.  This makes it expensive for the Council to administer and it is more difficult for low income households to manage their money and spending. Government funding cuts and the introduction of Universal Credit make the existing scheme less fit  for purpose.
  • Keeping the current scheme will mean small changes in income under Universal Credit, for instance, will result in frequent changes to the Council Tax residents pay, resulting in uncertainty for claimants and additional costs to the council in administration.

Option 1: banded scheme

What is a banded scheme?

  • Those of pensionable age will continue to receive maximum help based on their circumstances.
  • For other working age applicants an assessment will be carried out using income and capital of household compared to a needs allowance as now.
  • If the income of the household exceeds the need allowance CTR will be awarded based band that the ‘excess’ figure falls into
  • Any applicant who receives a ‘passported’ benefit will automatically be placed in the most generous band. This will include those on War Widows/War Disablement Pensions.

Impact of banded scheme

The Council wants to ensure the same overall amount of support is available to low income households. We expect there will be winners and losers, but we have tried to minimise this as much as possible.

  • There are currently 2,619 CTR from those of pension age at a total cost of £2.8m. This will remain unchanged by the banded scheme proposal
  • There are currently 1,724 residents on CTR based on passported benefits at a total cost of £2.1m. This will remain unchanged by the banded scheme 
  • There are currently 2,071 other working age residents on CTR at a cost of  £2,068,423. 
  • Under the banded scheme this expenditure will reduce very slightly with a saving of 0.06%  

The Council will:

  • Provide a transition fund for vulnerable residents facing financial difficulties
  • Help residents find work and provide money advice to support financial independence
  • We will refer any residents who may wish some support around financial planning to Citizens Advice

How would we work out the bandings?

Proposed Income Bands

Working age on ‘passported benefits’ such as Income Support

Group Excess Income CTR award
Working age passported claims   Up to 100%
Pension claims   Up to 100%

Working age disabled (those who qualify for a  disability premium)

Excess Income  CTR award based on CT liability
£0 - £4.99 100%
£5 - £14.99 95%
£15.00 - £29.99  87%
£30.00 - £49.99 80%
£50.00 - £74.99 65%
£75.00 - £99.00  42%
£100 - £124.99 25%
£125 upwards 0%

Working age with children

Excess Income  CTR award based on CT liability
£0 - £4.99  100%
£5 - £14.99 93%
£15.00 - £29.99 83%
£30.00 - £49.99 78%
£50.00 - £74.99 59%
£75.00 - £99.00 32%
£100 - £124.99 25%
£125 upwards  0%

Working age other

Excess Income CTR award based on CT liability
£0 - £4.99  96%
£5 - £14.99  85%
£15.00 - £29.99 73%
£30.00 - £49.99 66%
£50.00 - £74.99 42%
£75.00 - £99.00 28%
£100 - £124.99 18%
£125 upwards 0%

Option 2: No change: continue with the current scheme

Are there any alternatives to changing the existing Council Tax Reduction Scheme?

We have considered reducing the level of support for all working age customers – this would mean all working age applicants would have to pay a percentage of their Council Tax. Although this is a simple change to the scheme, the Council is conscious that any minimum payment must be affordable given the circumstances of the individual household, so this is not an option we would like to pursue.

If you need any further help or advice we will be holding some drop-in sessions at the locations below between 9:00am and 3:00pm

  • 3 September - Bodicote House, Bodicote, Banbury, Oxfordshire, OX15 4AA
  • 24 September - Franklins House, Wesley Lane, Bicester, OX26 6JU
  • 30 September - Exeter Hall, Kidlington, OX5 1AB
  • 1 October - Bodicote House, Bodicote, Banbury, Oxfordshire, OX15 4AA


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