Council tax system failing low-income households
Published
09th Aug 2007
Council tax benefit is failing to provide adequate financial relief to low-income households, a cross-party committee of MPs has said this week...
The Communities and Local Government Committee this week concluded that council tax benefit is failing to provide adequate financial relief to low-income households as a result of significant weaknesses in its operation.
The Committee’s report on Local Government Finance-Council Tax Benefit argues that council tax benefit is deficient on two main grounds. First, the rules governing eligibility and entitlement are too restrictive to adequately reduce the burden of council tax upon those in greatest need of relief. Secondly, take-up is extremely low, with only 62 - 68% of those eligible currently receiving benefits.
The Committee noted that the restrictive nature of the rules governing council tax benefit eligibility result in a situation where an estimated 600,000 children live below the poverty line in households which are not eligible for any relief from council tax.
Lowest take-up rate of any means-tested benefit
Government figures show that currently an estimated 700,000 adults are not eligible to pay income tax but are still liable to pay full council tax. This is one of several anomalies the Committee found between council tax benefit rules and those governing other parts of the tax and benefit system.
Dr Phyllis Starkey MP, Chair of the cross-party select committee, said: “It is unacceptable that a significant number of households in poverty do not qualify for any reduction in their council tax liability. We call on Government to urgently review its rules governing council tax benefit eligibility and entitlement to reduce the burden of council tax on low-income households. This is key to maintaining the credibility of council tax as a source of local government revenue.â€
Council tax benefit has the lowest take-up rate of any means-tested benefit. Dr Starkey added: “We call on the Government to do more to increase the take-up rate, not just for pensioners, but for all. The Government should accelerate efforts on data-sharing and its research into automatic assessment and billing of council tax benefit.â€
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