Less well off could get £600k tax break

Published: Wednesday 31st October 12

Pensioners, the low paid and the borough’s least well-off families could be given a £600,000 tax break under plans being considered by Wandsworth Council.

The town hall is currently considering its response to proposals for the reform of council tax benefit, which is part of the Government's wider shake-up of the benefits system.

And it has published proposals which would cushion the impact of the Government's changes on the borough's poorest households - in effect saving them from a £600,000 tax increase.  

Finance spokesman Cllr Guy Senior said: "In many other parts of the country, people on low incomes may soon find themselves having to pay council tax for the first time.

"While the sums involved may be modest, to many households this will be an added burden they will struggle to afford.

"Here in Wandsworth, we want to do what we can to protect pensioners, the low-paid and vulnerable families who are already struggling to pay their bills.

"With our long record as a low tax authority we do not wish to start increasing the tax burden for those least able to afford it."

Wandsworth's proposals have been drawn up in response to a Government announcement that it is reducing by ten per cent the funding it gives to town halls to pay for council tax benefit.

Instead ministers have told local authorities to come up with their own schemes from next April and said they will hand them the grant to administer it.

Wandsworth is now consulting the public on its preferred approach, which is to maintain the existing rules and protect benefit entitlement at current levels. Instead of forcing the poor to pay, the council would pick up the cost.

A council report published earlier this month stated: "In an environment of welfare reform where households have already seen the level of housing benefit reduce and with further welfare reforms proposed, it is difficult to envisage householders seeing council tax as a priority debt above rent and other household essentials."

The report concluded: "In maintaining a version of the current scheme into the next year the council will provide an element of stability for these low income households."

Some of the shortfall in Government grant could also be offset by technical reform to the council tax system by changes to discounts and exemptions that apply to second homes and empty properties.

Around 23,000 people living in Wandsworth are currently eligible for council tax benefit. This includes more than 8,500 pensioners and 14,400 people of working age. The existing cost of the borough's scheme is just under £11m.

Council tax bills in Wandsworth are the lowest in the country. The borough's Band D bill this financial year is £682, compared to a London average of more than £1,300.

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Recent comments

Why should the size of my house determine how much I pay for services we all enjoy. I already have to pay for my son's education because the schools in Wandsworth are so appalling. If you work hard you should be rewarded, if you are lazy and therefore poor you should accept your lot.
James Hole

13 November 2012

@Carol: There are already Bands E, F, G, and H - but I agree that adding another band or two at the top end would be a way of raising more Tax from those with high-end properties. Of course, the other way that the Council could raise more taxes is by doing away with their obsession with having the lowest Council Tax in the country - a policy which benefits the rich far more than the poor.
Neil Stead

8 November 2012

We should add a Band E, with a higher rate of council tax, to help offset benefit extended to the less well-off. We can afford it.
Carol Rahn

3 November 2012

Great - the working age taxpayer continues to further subsidise old/poor people. This has got to stop, if you use council services you should pay for them - If councils want to continue to subsidise pensioners, they should give up certain benefits in return such as the bus passes. We work hard to improve our quality of lfe, not to pay even more in taxes. Otherwise, why bother ?
simon

2 November 2012

As pensioners do we have to pay the council tax payment in December, or are you going to wave that, ?
Roderick J. Bennett

2 November 2012

Why is it so hard for the Council to report news without putting a "spin" on it? "the borough’s least well-off families could be given a £600,000 tax break" For a start, this implies that each family would get the £600,000 tax break, but in actual fact, this figure would be divided between all the eligible families - so if that was each of the 23,000 households that are currently eligible, it works out at just over £26 per household. And calling it a "tax break" when they are getting no more or less than they are now is disingenuous. That's like Supermarkets saying that I've saved £20 on my weekly shopping because they've decided not to put their prices up this week! I'm all in favour of this particular policy - but PLEASE, less Spin
Neil Stead

1 November 2012

hope this goes to the deserving service personnel's families, pensioners who have worked hard all their lives and that it will not discourage people from going back to work
anne kearns

31 October 2012