Guide

Council tax benefit abolished

In April 2013, the government abolished council tax benefit – the benefit scheme which enabled people on benefits and low incomes to have some or all of their council tax paid.

Outline

When the government replaced council tax benefit in April 2013 with the so-called Council Tax Reduction scheme, it instructed councils to design their own local schemes. Councils also had to absorb a 10% cut in support for schemes from central government. Pensioners are not affected. 

Problems

The majority of councils have responded by demanding council tax payments from people who often struggle to make them. Some councils have pursued those payments aggressively.

In 2014, the Institute for Fiscal Studies has found that “of the two million working-age households who had all their bills met under the old system, 1.4m (70 per cent) are now paying some council tax. One million pay at least £85 a year; a quarter at least £170 and 10 per cent at least £225.” 

That has led to real problems for many people on benefits and low incomes. Recent False Economy research showed a 30% jump in the number of people facing court proceedings because of council tax benefit cuts: if a liability order is granted, money owed for council tax can be deducted straight from people’s wages or benefits. This happens to people who can least afford to make those payments. 

Queues of people have been summonsed to court for council tax non-payment as a result of this change, and this has been regularly reported in the press.

The Reverend Paul Nicolson continues to protest against the council tax benefit cut by refusing to pay his council tax

Links

Council tax: Huge queues outside courts as thousands prosecuted over arrears in “Poll Tax Mk 2”
Mirror report: an estimated 1.9 million people who did not previously have to pay the tax are now liable for between 10% and 30% of the full bill.

Low income families ‘worst hit’ by cuts in council tax benefit as thousands struggle with household bills
Report of Institute of Fiscal Studies research in the Independent.

Rev Paul Nicolson’s court hearing for refusal to pay council tax
Explanation of his protest and the actions of Haringey council in imposing the highest possible court costs.

Thousands in court for council tax arrears as benefit cuts hit home
Guardian piece on how many people, who were formerly exempt from paying, now face court, as the bedroom tax adds to spiralling debt burden.

Withdrawal of council tax support leads to 30% increase in court proceedings
Guardian report based on research by False Economy.