Currently, Council Tax Benefit (CTB) is assessed by local authorities on behalf of the Department of Work and Pensions (DWP) but the rules governing the assessment process are applied the same way throughout the UK.

From April 2013, the Local Government Finance Act 2012 replaces CTB with Council Tax Support (CTS). This new system requires local councils to create and operate their own schemes for the financial year 2013 / 2014 onwards. However, the funding from Government will be cut by 10% for this same period which means any scheme developed by the council will be expected to find 10% savings in the design and administration of their replacement schemes.


Local councils in England had until 31 January 2013 to develop their own scheme ready to take effect from 1 April 2013. If a council failed to approve a scheme by this date, a default scheme would take effect as provided by regulations. [1]

The schemes must provide the same level of support to pensioners as currently under CTB so any cut in support falls entirely on working-age recipients. As each authority is responsible for making it’s own scheme, the amount a person receives in council tax support will vary depending on the area where the support is being sought. A website is available which shows each individual scheme.

At the time of writing, all 326 have decided their schemes and some key points provide a national overview: (List of key points reproduced with the kind permission of the New Policy Institute)

  • Of the 326 new schemes, 75% of councils will be reducing the level of support for council tax benefit recipients.
  • 25% will be making no change, thus absorbing the entire funding cut into their council budget.
  • Almost three quarters (72%) of councils will introduce a minimum payment. A minimum payment could be in the form of a maximum cap on the amount of Council Tax support available to households (eg. capping the amount available at 80% available so that all working age adults pay at least 20% of their council tax) or a uniform reduction in support (eg. £5 per week).
  • Within this, 46% of councils have opted for a minimum payment of 8.5%: this means that all working-age people will have to pay at least 8.5% of their council tax liability regardless of income. Around 40% have opted for a minimum payment of10–20%, and the remainder for a minimum payment of above 20%.
  • The reduction or removal of the second adult rebate (the benefit homeowners not on a low income are entitled to if they share their home with someone on a low income) is also a popular component of the new schemes (52% of featured councils).
  • 34% of featured councils intend to introduce a discretionary fund for persons experiencing exceptional hardship.
  • 19% intend to introduce a band cap which involves limiting the amount of benefit received in higher value properties to the amount provided to those in lower value properties (most that are applying the cap at the entitlement of band D properties).
  • The maximum savings limit (the savings limit over which one is no longer eligible for council tax benefit ) is being reduced by about 18% of councils, with most reducing the threshold to £6,000 from £16,000.
  • 25% will be changing non-dependent deductions (the benefit low income homeowners are entitled to if they share their home with someone not on a low income). While a few councils are removing non-dependent deductions altogether, almost all councils are increasing the deductions.
  • 18% are changing the rules relating to back-dating.
  • 13% of councils will introduce a minimum CTS payment to residents (eg. £5 per week: claimants will only receive benefit payments of £5 and above).10% are counting other benefits as income (Child Maintenance seems to be the most common benefit to be counted as income).
  • 7% of councils will change the income taper.

Wales and Scotland

The 10% cut in funding will also apply to Wales and Scotland. At first Wales had planned to make 10% savings from Council Tax Benefit but on 17 January 2013, the Welsh Government announced an extra £22 million in funding so local authorities in Wales didn’t need to find the extra savings.

Scotland has also decided to keep the Council Tax Support at previous levels and find the savings elsewhere.