Universal Credit inequality sees Town Hall voting on new scheme for council tax support

Camden Town Hall. Photograph: Camden Council

Camden Council is set to modify its scheme providing council tax support to the borough’s poorest households, right down to changing the name of it.

The new arrangements, which will be rebranded from the Council Tax Reduction Scheme (CTRS) to the Support Scheme (CTSS), are set to address inequalities seen by those on Universal Credit (UC) who are in work, who would see an 8.9 per cent reduction in support under the current scheme.

The Town Hall says that the government’s assumptions within UC over the minimum eligible income for support could impact over 1,000 self-employed claimants unless the CTRS is redesigned.

Cllr Richard Olszewski (Lab & Co-op, Fortune Green), cabinet member for finance, said: “Camden has made clear its commitment to tackling poverty and supporting those most in need and taken steps to support households in need.

“The council now has an opportunity to redesign a CTRS for working age households that is based around the needs of Camden citizens and is simpler to claim and sustain, addresses some of the issues with Universal Credit and reduces unnecessary administration.”

It is understood that the introduction of the CTSS would see a saving of £500,000 in administration costs next year.

Other problems identified with the current scheme are that claims can only be backdated by one month, which causes problems for people moving on to UC who do not realise they need to make a separate claim for CTRS, as well as requiring a reassessment every time a person’s income changes by 50p, with  the council currently undertaking 50,000 reassessments per year.

The new scheme will move from a taper structure, by which a percentage of a person’s income is deducted from their council tax, to being  based on five income bands, ranging from those who are not working or earning less than £86/week, to those earning Earning between £425.71 to £483.75/week.

The council will also cease using enforcement agents for those on CTSS in what is says will be a “fair and sensitive debt collection process.”

Independent consultant organisation Policy In Practice, who Camden commissioned to predict the impact of the scheme, has warned that people can see reductions in support if they move from one band to the next, with current estimates showing that 2,351 households will be better off under the bands while 1,620 would lose support.

Single parents see the biggest increase in support under the changes at a rise of 5 per cent, whilst couples with children are seeing an average decrease of 2.8 per cent.

Also consulted were One Housing, the Child Poverty Action Group and charity Zacchaeus 2000 (Z2K), which said said that it had concluded that the CTSS “will ensure Camden retains it place at one of the top third most generous schemes in London and will be simpler to understand.”

Z2K sounded a note of concern over the impact of “cliff edges” for those moving between the income bands, as well as a planned flat rate of 30 per cent support for ‘non-dependants’ (e.g. grown-up sons or daughters still living at home) over the age of 25 and in work, asking that the council keep both the bands and the deductions for non-dependants under review.