Council Tax Support Shambles

No Poll Tax 2Z2K today welcomed the House of Commons Public Accounts Committee’s (PAC) hard-hitting report on the Government’s implementation of new arrangements for Council Tax Support for local authorities’ poorest residents.

PAC’s short inquiry revealed that many local authorities had failed to protect vulnerable claimants and that work incentives were being undermined by the new policy.  For example, in 19 local authority areas, up to 225,000 people will lose as much as 97 pence for every extra £1 they earn and 22 local authorities had introduced schemes that counted child maintenance payments as income when calculating local Council Tax Support entitlements.  The committee also raises serious concerns about the interaction of Council Tax Support with Universal Credit and the Government’s slow progress in establishing a timetable and terms of reference for the promised independent review.

Z2K opposed the abolition of a national system of Council Tax Benefit and its replacement by 326 different local support schemes and has been campaigning to persuade local authorities not to introduce minimum payments to make up for the 10 per cent cut in Government funding.  Many of our clients are being asked to pay up to £5 a week from Job Seekers Allowance of just £71, and are then rapidly hit with a court summons and extra legal costs when they fall behind with the payments.  So far 53,000 claimants in London alone and almost half a million nationally have been issued with court summons for non-payment.

Responding to the committee’s report, Z2K Chief Executive, Joanna Kennedy said:

“The Public Accounts Committee has done a real service in exposing this half-baked policy.  The local Council Tax Support schemes many local authorities have introduced are completely undermining work incentives for the low paid and driving those out of work into debt and the arms of payday lenders.  In London alone, tens of thousands of those who are disabled or unemployed have been dragged to court for failing to keep up with payments they simply cannot afford.  No wonder it has been dubbed the New Poll Tax by those on the receiving end.”

“Z2K hopes the committee’s report will serve as a wake-up call to both to ministers and Opposition spokesmen.  The Government must now urgently set out a timetable and terms of reference for its review.  And Labour must come out of hiding and make its own position on this dreadful policy clear.  In the meantime, we hope more local councils will follow the lead of Hammersmith & Fulham, Havering, Kensington & Chelsea, Merton, Tower Hamlets, Wandsworth and Westminster who have all decided against taxing the meagre benefits of their poorest residents.”

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