Labour and Lib Dems slam ‘regressive’ council tax hike for Hackney’s poorest
Town Hall invites feedback on changes to council tax relief
Hackney Council’s plans to raise council tax for the borough’s poorest has been slammed as “regressive” by critics who call for extending a consultation on the hike.
The council is looking to save money by raising council tax for working age residents who qualify for its Council Tax Reduction Scheme, which currently helps 32,000 people.
The proposed changes would mean a five per cent hike on how much these residents pay, from 15 to 20 per cent of their full council tax.
A consultation on the plans, which runs until 30 November, asks: “To what extent do you agree or disagree with the Council’s preferred option of updating the current scheme and increasing the minimum contribution required from working age recipients from 15 per cent to 20 per cent?”
It goes on to ask for alternative ways to fund the scheme if the increase is shelved.
The move has prompted opposition from Hackney South Labour Party, who voted last night for a motion asking the council to scrap the change. Hackney Green Party is also against the increase.
Now, the local Liberal Democrats have called the move “regressive” and said the plans should be halted, offering other ways to pay for council tax relief.
Darren Martin, spokesperson for the Hackney Liberal Democrats, said: “The Town Hall’s plans to increase the minimum contribution which all working age CTRS claimants have to pay from 15 per cent to 20 per cent of their council tax liability, regardless of income and circumstance is regressive and will affect the poorest in Hackney.
“Their own local Labour Party are calling for this to be halted and it is clear that the plans need to be looked at again.”
He added: “We call on the Mayor to halt the plans and extend the consultation period to consider other more progressive options which we are putting forward today.”
The council has said the changes would still see council tax relief of 80 per cent for working age residents who qualify.
You can tell Hackney Council what you think of the council tax hike by filling out this online consultation survey.
These were the alternative options the Lib Dems put forward as alternatives to be considered :
“The Liberal Democrats believe that increasing the minimum contribution paid by all working age claimants of CTRS regardless of income or circumstance should be the final resort and not a preferred option.
We propose that the following options are looked at in detail and that the current consultation is extended while they are put to residents.
One or a combination of the following five options would reduce the cost of CTRS in a fairer and more progressive way.
Option 1 – Reducing Backdating to 1 month
Currently claims for Council Tax Reduction from working age applicants can be backdated for up to 3 months. Central Government has reduced the period for Housing Benefit claims to 1 month. It is proposed that the Council’s Council Tax Reduction Scheme be aligned with the changes for Housing Benefit. It is a simple alteration to the scheme which is easy to understand when claiming Housing Benefit and Council Tax Reduction.
Option 2 – Reducing the period for which a person can be absent from Great Britain and still receive Council Tax Reduction to 4 weeks
Within the current scheme, applicants can be temporarily absent from their homes without it affecting the Council Tax Reduction. This replicated the rule within Housing Benefit. Housing Benefit has been changed so that if a person is absent from Great Britain for a period of more than 4 weeks, their benefit will cease. We propose that the Council’s Council Tax Reduction scheme is amended to reflect the changes in Housing Benefit. There will be exceptions for certain occupations.If a person is absent from Great Britain for a period which is likely to exceed 4weeks, their Council Tax Reduction will cease from when they leave the Country. They will need to re-apply on return
Option 3- Basing Council Tax Reduction on a set minimum for self-employed earners after a minimum of 1 year’s self-employment.
This would align Council Tax Reduction with UniversalCredit, it would assume a minimum level of income for those who are self-employed – this is known as the Minimum Income Floor. This amount would be in line with the National Living Wage or the National Minimum Wage (for under 25’s) for 35 hours worked per week. If someone who is self-employed earns less than this amount, we will take the Minimum Income Floor as an assumed level of income. Any income above the assumed Minimum Income Floor, would be taken into account based on the actual amount earned.The income would not apply for a designated start-up period of one year from the start of the business. Variations would apply to any person who is both employed and self-employed.
This brings the treatment of income for self-employed claimants for Council Tax Reduction broadly into line with Universal Credit.
Option 4- Reducing the maximum amount of savings a claimant can have before losingentitlement to £10,000.
This was mentioned by the council in the consultation briefing as an option that was looked at but no further details given as to why it was disregarded. This option is progressive in nature as it reduces entitlement to those with considerable savings and it seems fairer than asking the poorest with little or no savings to pay more.
Option 5- To introduce a standard level of non-dependant deduction for all claimants who have non-dependants resident with them.
We propose that this option would only apply to working age adults who are able to work and the deduction would not apply where a resident non-dependant is a carer.
The option assumes the point that working age residents sharing a property would be able to make this contribution.
Emergency fund-
During the implementation of any changes things can and will give wrong. It is important that nobody is put in financial difficulty during this period and so we propose and emergency fund be set up to deal with any issues experienced by residents.”
Published and promoted by Darren Martin for the Hackney Liberal Democrat’s at 74 Amhurst Road E81JN
an increase in tax rate from 15% to 20% is a 33% increase in the amount paid.