If you are a Wandsworth resident liable to pay Council Tax, this is an opportunity to share your thoughts on our proposed revision of the CTR scheme.
Please ensure you have read all the information on this page before you complete the survey.
Over the next few years, working-age residents in receipt of Council Tax Reduction will transition over to Universal Credit.
Under the current CTR scheme, changes in income and household composition may cause a recalculation of entitlement which may lead to a new Council Tax Bill being sent to the claimant every time a change is actioned.
The aim of the change to the CTR scheme is to create an adaptable and simple structure, that minimises the impact of income fluctuations, reduces administrative burden to the Council in application, that protects the Council’s most vulnerable residents including those already receiving CTR under the current scheme and provides additional support to many of these households.
Council Tax is a form of local taxation that helps pay for local services, such as refuse collection, care for elderly, and the police and fire service.
The level of Council Tax a household is required to pay is based on the defined band of the property they live in, less any discounts or exemptions for which they qualify.
From 1 April 2013, Council Tax Benefit was replaced by localised schemes. In Wandsworth this is called the Council Tax Reduction scheme.
Council tax reduction is to help people who are on a low income to pay part or all of their Council Tax. The Government requires us to protect the claiming process for pension age claimants so there are two CTR schemes in place:
Currently Wandsworth Borough Council calculates Council Tax Reduction through a Means Tested benefit scheme using government rates amended annually. A Means Tested reduction scheme is based on a claimant’s income and savings, the present scheme requires a minimum contribution of 30% of the eligible charge – unless you fall into the vulnerable category.
The scheme also adopts a protection scheme for vulnerable households, reducing their minimum contribution to nil, these vulnerable households include:
The proposals aim to strike a balance between the need to provide financial stability to residents while maintaining a scheme that is financially sustainable for the Council’s wider budget.
The level of support provided to pensioners by the scheme is determined by the government, therefore if you are a pensioner the level of support you receive will be unaffected by the consultation proposals.
The proposed scheme designates working-age residents to one of the five eligibility levels based on specific criteria, utilizing status and a maximum income figure.
The status bands are as follows:
Status band |
Status band definition |
CTR percentage reduction |
Earned income caps |
Working Age 1 |
Vulnerable household (based on existing criteria and residents with dependents under 3 years of age) |
100% |
n/a as no earnings |
Working Age 2 |
Households with no earned income with children |
95% |
n/a as no earnings |
Working Age 3 |
Households with no earned income without children |
80% |
n/a as no earnings |
Working Age 4 |
Households with earned income with children |
75% |
Lone Parent/Couple with 1 or 2 Children - £250 Lone Parent/ Couple with 3+ Children - £275 |
Working Age 5 |
Households with earned income without children |
70% |
Single Person -£125 Couple without Children - £160 |
Under the new scheme vulnerable people including residents with dependents under 3 years of age are still protected and will have their CTR calculation based on 100% eligible Council Tax.
The main change with the proposal is that a maximum income has been introduced. This has not affected the current caseload as the table below demonstrates.
The Maximum Net income levels can be adjusted over time to take into consideration rising incomes against the rising cost of living which impacts all the identified protected groups.
Using Wandsworth’s current caseload, this scheme benefits 3,286 working-age residents, by reducing their council tax bills. The further 5,561 working age claimants are not affected by the proposal, as shown in the table below:
CTR scheme | CTR percentage reduction | Claimants benefiting | Variant no difference | Current total caseload |
---|---|---|---|---|
Working age 1 | 100% | 527 | 5,561 | 6,088 |
Working age 2 | 90% | 900 | 0 | 900 |
Working age 3 | 75% | 1,477 | 0 | 1,477 |
Working age 4 | 80% | 257 | 0 | 257 |
Working age 5 | 75% | 125 | 0 | 125 |
Totals | 3,286 | 5,561 | 8,847 |
This scheme is more generous and will cost more, which may result in an increased Council Tax liability for those that pay. It is important to note however, that Wandsworth already has a low Council Tax compared to other London boroughs.
Over the next few years, working-age residents in receipt of Council Tax Reduction will transition over to Universal Credit.
In response to this UC rollout, this new proposal poses a simplified and stabilised alternative scheme to remove administrative burdens for both working-age claimants and the Wandsworth local authority.
We want to strike a balance between the need to provide financial stability to residents whilst maintaining a scheme that is financially sustainable for the Council’s wider budget.
For this reason, we want to consult with our residents in order to provide a favourable scheme.
The scheme has a number of benefits:
This is a more efficient and simplified scheme, creating a transparency for residents and the Council.
Based on the current CTR caseload, there is a 9% increase in annual costs from £5,269,699 to £5,756,673.
This scheme results in no households receiving less CTR and 3,286 receiving additional support.
We considered three alternative schemes:
To retain the existing means tested scheme. This does not remove any of the administrative burdens caused by the UC rollout
A means-tested 100% Reduction Scheme, which increased the maximum CTR from 70% to 100%, removing the concept of a minimum contribution. This scheme does not remove any administrative burdens caused by the UC rollout, and therefore does not solve the income fluctuation issue
An Income Banded scheme. This was the most complicated, did not benefit all of those households currently eligible for CTR and was the most expensive
Unemployed lone parent with two children between the ages of 5 and 15 and in receipt of out of work benefit Universal Credit. The eligible weekly Council Tax is £20
Council Tax Reduction status band
Working age 2 - Household with no earned income with children.
They will receive a CTR percentage reduction of 90%
Weekly Council Tax Reduction - £18
Weekly Council Tax to pay - £2
Current Scheme
The same household currently receives a 70% Council Tax Reduction.
Weekly Council Tax Reduction - £14
Weekly Council Tax to pay - £6
Under the status banded scheme the household will receive more support towards their Council Tax.
A single person with no children. They have earned income of £120 weekly. The eligible weekly Council Tax is £20
Council Tax Reduction status band
Working age 5 - Household with earned income without children.
They will receive a CTR percentage reduction of 75%
Weekly Council Tax Reduction - £15
Weekly Council Tax to pay - £5
Current Scheme
Maximum Council Tax Reduction would be 70%. Due to scheme being means-tested, any income or capital will further reduce entitlement.
Weekly Council Tax Reduction - £12.96
Weekly Council Tax to pay - £7.04
Under the status banded scheme the household will receive more support towards their Council Tax.
Have your say
We would like to hear your views on the Council’s proposal by taking part in this survey. It should not take more than 10 minutes to complete, and your opinion is important to us.
You can access the online survey below, but if you would like a paper copy or a different format, please contact us at ctrconsultation@wandsworth.gov.uk or on 020 8891 1411.
What happens next
All feedback received will be considered before a decision is made on the way forward. If the proposed scheme is approved, the changes will take place from 1 April 2024.
Share
Share on Twitter Share on Facebook