Universal Credit claimants may get Council Tax reductions – check now ahead of 5% hikes | Personal Finance | Finance


Universal Credit claimants may qualify for a reduction on their Council Tax bills. To check on this, claimants will need to head to the Government’s website and get the contact details of their local authority for more information.

How much can bills be reduced by?

People may be eligible for Council Tax reductions if they’re on a low income or claim benefits such as Universal Credit. In some instances, a bill could be reduced by up to 100 percent.

Claims for a reduction can be made by those who own their home, rent, are unemployed or are working. There are a number of variants which affect the discount available.

Where a claimant lives will impact what’s offered as each council runs its own scheme. A household’s circumstances will also have an effect, with finances and family dynamics taken into account.

Additionally, extra help was offered in this area over the last 18 months or so in light of the pandemic. Because of coronavirus, the Government funded an extra £150 discount for people who qualify for Council Tax reductions. This should automatically apply to new claims, while existing claimants should have already received a new Council Tax bill to reflect this.

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Two-thirds of English councils have said they are considering a rise in council tax to help fund public services. Several other local authorities also recently refused to rule out increases down the line.

It is believed the increases would help fund health and social care plans but many council leaders, speaking with the BBC, have warned funding shortfalls will still be problematic, raising the chances of hikes.

Lisa Nandy, shadow secretary of state for Levelling Up, Housing and Communities, warned the “double-whammy” will leave families worse off.

She said: “It will be the communities the Government promised to ‘level-up’ who will be hit hardest – in towns and villages across the country, with older populations where people are already struggling to make ends meet.

“Instead of delivering for people in these communities, the Government’s ‘double whammy’ National Insurance and council tax will leave people worse off.”

The BBC contacted 152 councils in England who are responsible for social care and of the 121 which responded, two-thirds said they were considering a tax rise from next April.

Five percent increases

In October, Nick Drewe, money-saving expert at WeThrift, warned councils across the UK would be forced to raise their rates drastically for the coming year to cover the Government’s spending plans.

He warned: “Under Government spending plans, a rise of at least 3.6 percent on Council Tax bills will be required every year in order to maintain services at pre-pandemic levels. We can therefore expect Council Tax price hikes to continue for at least the next three years.

“By 2024/25, many are speculating that Council Tax prices will have increased by up to five percent. Consumers should also be prepared for further volatile gas prices and the potential collapse of more suppliers within the industry.”

In December 2020, the Government gave English councils the green light to introduce Council Tax hikes of up to five percent if needed. Under the current rules, local authorities can add two percent to bills, and another three percent if they provide adult social care.

These rises have been allowed since April 2021 but as they were introduced last winter, Robert Jenrick, the then Secretary of State for Housing, Communities and Local Government, assured the rises would not be obligatory.

Speaking in the House of Commons, he said: “Local councils are not under any obligation to increase Council Taxes.”

Council tax bills are largely dependent on what band a person’s home is in. In England and Wales, these bands stretch from A to H and the rank awarded will depend on a property’s location, value and other factors.

It is possible to check on one’s band through the Government’s website and impartial guidance can be sought from the likes of Money Helper and Citizens Advice.

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