Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 16 December, 2013
Report of the Leader
Council Tax Reduction Scheme
Purpose of the Report
1. To consider the outcome of the consultation and equality impact assessment for the Council Tax Reduction Scheme and recommend the adoption of the scheme.
1. To note the making of the Council Tax Reduction Scheme and Prescribed Requirements (Wales) Regulations ("the Prescribed Requirements Regulations") by the Welsh Assembly on 26 November 2013.
2. That any amendments to Regulations made by the Welsh Government are reflected in the scheme.
3. That the national scheme is adopted with the following discretions -
· That the Council should continue to allow extended payments up to a maximum of 4 weeks.
· That the Council should continue to disregard War Widow and War Disablement pensions in assessing income for Council Tax Reduction.
· That the Council should continue to allow backdated benefit for a period up to 26 weeks.
4. That the scheme is put forward for consideration by Council on 18 December 2013.
Reasons for the Recommendations
1 - 4 To enable the Council Tax Reduction Scheme to be approved by Council by 31 January 2014 and be in place for implementation from 1 April 2014.
2. As part of the UK Government's Welfare Reform Agenda, with the enactment of the Welfare Reform Act 2012, the Council Tax Benefit scheme was abolished with effect from 31 March 2013. The Local Government Finance Act 2012 enabled the Welsh Government to make regulations to establish a Council Tax Reduction Scheme in Wales. From 1st April 2013, a new scheme called Council Tax Reduction was introduced. The Welsh Government’s current Council Tax Reduction Scheme will end on the 31st March 2014. For 2014/15 the Welsh Government have made new regulations which replicate the existing 2013/14 regulations on which the national Council Tax Reduction Scheme was based. There are two sets of regulations governing the scheme.
· The Council Tax Reduction Schemes (Default Schemes) (Wales) Regulations, which establish a single national framework scheme which would be imposed on any council that fails to adopt its own scheme by 31 January 2014;
· The Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations, which set out the national requirements that each billing authority must satisfy and also enable additional areas of local discretion that authorities might wish to implement.
3. The Welsh Government is currently working on amending regulations to uprate the financial figures in line with inflation. These are dependent on the Chancellor's Autumn Statement. The scheme will need to take account of any subsequent Regulations made by the Welsh Government following the adoption of the local scheme.
Relevant Issues and Options
4. Welsh local authorities have until 31 January 2014 to adopt a scheme exercising any of the discretions permitted under the Prescribed Requirements Regulations. This requires a decision by full Council. If the authorities fail to adopt a Council Tax Reduction Scheme by that date the default scheme will apply. With regard to the areas of discretion under the Prescribed Requirements Regulations, the local authorities will only be able to implement discretionary elements that are more generous than the minimum requirements set out in the regulations, and that any flexibility is to be locally funded.
5. The changes to the scheme in 2014-15 are mainly technical and are set out in Appendix A.
6. The discretionary elements outlined in the prescribed scheme regulations are:
· The ability to increase the standard extended reduction period of 4 weeks given to persons after they return to work where they have previously been receiving a council tax reduction that is to end as a result of their return to work;
· Discretion to disregard part or the whole amount of War Disablement Pensions and War Widow’s Pensions when calculating income; and
· The ability to backdate the application of Council Tax Reduction with regard to late claims prior to the standard period of three months before the claim.
7. In relation to the discretions, the position is as follows -
Extended reduction period (Extended Payments)
8. In the year 2012/13, £23,823 was paid out for extended payments to assist customers. This year up to 28th November 2013, £16,430 has been paid out.
9. In prescribed circumstances, an award of Council Tax Reduction will be extended for a period of up to 4 weeks where entitlement to certain qualifying benefits ends due to:
· starting employment either employed or self-employed, or
· a claimant increasing working hours to 16 hours or more, or
· a partner increasing working hours to 24 hours or more, or
· increasing earnings to an amount that ends entitlement to Income Support/Job Seekers Allowance (Income Based)/Employment Support Allowance (Income Related) or (Income Based)/Severe Disablement Allowance / Employment Support Allowance (Contribution Based).
10. The aim is to help incentivise long-term unemployed, sick or disabled people to take up work, earn more income or work more hours.
11. To qualify for extended payments:
· The claimant must expect their job or increased hours to last at least 5 weeks.
· The claimant or their partner has been entitled to Employment and Support Allowance – Income Related (ESA (IR)), Jobseekers Allowance – Income Based (JSA (IB)), Jobseekers Allowance – Contribution Based (JSA (C) ) or Income Support continuously for at least 26 weeks (or any combination of these).
· Immediately prior to starting work the customer or partner must have been on ESA (IR), JSA (IB) or Income Support.
12. They may also qualify if:
· The claimant or partner has been entitled to Employment and Support Allowance (Contribution based), Incapacity Benefit or Severe Disablement Allowance and again their job or increased hours is expected to last for 5 weeks or more and they have been entitled to the above benefit continuously for 26 weeks.
13. In both cases their benefit must cease due to the result of them starting work or increasing their hours.
War widow and war disablement pensions
14. The council currently disregards the whole amount of War Widow and War Disablement pensions when calculating income for Housing Benefit and Council Tax Reduction. In the year 2012/13 £15,384 was paid out as a result of disregarding War Widow and War Disablement pensions.
Backdated Benefit / Reduction
15. In the year 2012/13 £14,966 was paid out for back dated claims to customers in receipt of an award under the Council Tax Benefit Scheme. This year up to 28th November 2013 £9,634 has been paid out under the Council Tax Reduction Scheme. The current rules for backdating of a working age customer are:
· The claimant must make a request in writing,
· The customer must show continuous good cause for his or her failure to make an earlier claim,
· The claim cannot be backdated more than 6 months before the date of the written request.
16. "Good cause" has been explained by tribunals and courts. The main principles are:
· "It includes any fact that would have probably caused a reasonable person to act as the claimant did", but they are expected to take reasonable steps to ascertain what their rights may be.
17. Case Law establishes that good cause normally falls into four categories:
· The claimant was so ill (physically or mentally) or otherwise unable to act that they could not claim and could not ask someone to do it for them.
· Someone the claimant should have been able to rely on (such as the Local Authority, the DWP, an advice agency and possibly others) advised them they could not get HB/CTR when in fact they could.
· There were good reasons for the claimant not believing they could claim, amounting to more that just not thinking or caring.
· Some external factor prevented the claimant from making a claim (e.g. failure of the postal service, imprisonment).
Proposals – extended payments
18. It is proposed that the Council should continue to allow extended payments up to a maximum of 4 weeks for the Council Tax Reduction Scheme in 2014-15 because this incentives people to work or take on extra hours of work and any claimant moving into employment is likely to receive their first payment from their new employer within this timescale.
Proposals – War pensioners disregard
19. It is proposed that the council should continue to disregard War Widow and War Disablement pensions in assessing income for Council Tax Reduction in 2014-15.
Proposals – backdated awards
20. It is proposed that the council should continue to allow backdated benefit for the Council Tax Reduction Scheme in 2014-15 for a period up to 26 weeks. It would be difficult for "good cause" to be proved continuously by the customer for any longer period. Also under the Housing Benefit rules backdating is for a maximum of 26 weeks which would ensure that the two schemes remain aligned. If both schemes are not aligned it would be very confusing for the customer as it would be very difficult to explain the differences in the two schemes.
Consultation and equality impact assessment
21. The Welsh Government have consulted in relation to the national requirements. The Council needs to consult in relation to the decisions on exercising discretions for the locally based scheme. In December 2012 the Council undertook an extensive consultation and wrote to all claimants who were at that time in receipt of Council Tax Benefit. The report is set out at Appendix B. As the Welsh Government have recently made new regulations which replicate the existing 2013/14 regulations on which the national Council Tax Reduction Scheme was based then the same level of consultation was not required. The consultation was posted on the council's web site with a hard copy being available at the Council Tax and Benefits enquiry counter. The consultation report will be circulated following the closure of the consultation on 13 December 2013.
22. The Council was also required to undertake an equality impact assessment in relation to the decisions to be made regarding the exercise of discretions. In addition to consultation with residents the Council also consulted with local interest groups. The following questions were included in addition to the main consultation document:
· "In your opinion should the Council offer these discretions"
· "Please advise how these discretions will affect the services you provide"
· "Please advise how these discretions will affect how you operate your services"
· "Will the discretions require a significant commitment of your resources"
· "How will the discretions have an effect on a specific group that you represent"
· "Have you any other comments about the discretions that you would like to make"
23. The outcome of the equality impact assessment will be circulated following the closure of the consultation on 13 December 2013.
Resource Implications (Financial and Employment)
24. The local government revenue settlement includes an amount of £244m to fund the Council Tax Reduction Scheme for 2014/15. This is the same amount as was ultimately included in the 2013/14 settlement following the additional allocation of £22m. This again means that no contribution is required from claimants to their council tax unless the means test determines that they are entitled to a partial reduction.
25. The Vale of Glamorgan’s share of the £244m is £8.722m this is a reduction on last year’s allocation of £8.735m. The allocation is based on updated expenditure and case load data.
26. Councils are required to finance the impact of increases in council tax and deal with the risk of caseload changes.
27. In 2013/14 an allocation of £702k was made to allow for an increase in council tax and claimant numbers. This gave a total budget of £9.437m. Spending to date on the 2013/14 scheme is £9.148m. Current CTRS caseload is 10,825 compared with 10,932 in April 2013.
28. An amount of £9.437m has been included in the initial budget for 2014/15. The final budget will need to take account of the agreed council tax increase for 2014/15.
29. The costs of exercising the discretions as proposed in the report are estimated as follows-
War pensions disregard
30. It should be noted that the costs of extended payments and backdated awards would be offset against collection losses. As in the current year, the costs of these discretions will be absorbed within the available budget and kept under review.
Sustainability and Climate Change Implications
31. There are no direct climate change implications, however, the council needs to ensure that measures put in place for council tax reduction are financially sustainable.
Legal Implications (to Include Human Rights Implications)
32. The council will be required to implement the Council Tax Reduction Scheme in line with Welsh Government Regulations and primary legislation.
Crime and Disorder Implications
33. Future changes to benefit may have implications.
Equal Opportunities Implications (to include Welsh Language issues)
34. Central Government and the Welsh Government have assessed the equality implications of the welfare reforms nationally. The council has undertaken an equality impact assessment on the scheme for 2014-15.
35. The service objective is to administer and pay Council Tax Reduction to eligible claimants
Policy Framework and Budget
36. The final decision on the adoption of the Council Tax Reduction Scheme will need to be made by the full council.
Consultation (including Ward Member Consultation)
37. Consultation has taken place as outlined in the report.
Relevant Scrutiny Committee
38. Corporate Resources
Nigel Smith - Revenues and Benefits Manager
Maureen Neave - Benefits manager
Paul Russell - Council Tax Manager
Robert Jones - Consultation Officer
Siân Davies - Director of Resources