The abolition of council tax benefit is every bit as disgraceful as the hated bedroom tax – but has yet to hit the media headlines. Liz Davies explains why it will be so damaging
The government’s assault on the poor includes abolishing council tax benefit. This is just as pernicious as the bedroom tax but has received less publicity. It came in on May 1.
Prior to this, council tax benefit was means-tested and administered by local authorities.
If you were on employment and support allowance or jobseeker’s allowance, or your income was at that level, you received 100 per cent council tax benefit, leaving you with nothing to pay.
Slightly higher incomes were means-tested, so that you could still receive some council tax benefit.
In place of council tax benefit, the government introduced a “council tax-reduction scheme.”
The name suggests lower council tax bills. It is nothing of the sort.
It is simply a subsidy from government to local authorities to replace council tax benefit.
But the big difference is that the “council tax-reduction” subsidy is only 80 per cent the amount that a local authority used to receive in council tax benefit.
So claimants who were receiving 100 per cent council tax benefit now only have 80 per cent of their council tax bill reduced, leaving them to pay 20 per cent. Around two million people are affected.
The difference between 100 per cent council tax benefit and 80 per cent council tax reduction is £400 million – that’s the amount cut by the government.
It never ceases to amaze me how this government can believe that someone who receives what the state decides is the bare minimum required to survive – and pay for food, heating, lighting and other essentials – can suddenly be asked to find extra money from that subsistence amount.
Jobseeker’s allowance was not calculated to include a 20 per cent contribution towards council tax, just as it was not calculated to include the bedroom tax.
The government’s intention is to blame local authorities for this cut.
By simply giving local authorities a pot of money equivalent to 80 per cent of the amount that they used to receive in council tax benefit, it can claim that if local authorities pass the 20 per cent shortfall onto each council taxpayer, that is their choice.
The government can say that local authorities could choose to reduce council tax by 100 per cent – on a means-tested basis – but have decided not to.
Of course, it is a fake choice. If a local authority decides to retain 100 per cent reduction of council tax, it will have to find the extra 20 per cent from its budget. So will be looking at making cuts elsewhere.
It falls to local authorities to collect council tax, and so we are suddenly back to the days of the poll tax.
Brent and Southwark councils have each issued thousands of applications for liability orders in the magistrates’ court, predominantly against people who previously received 100 per cent council tax benefit and are now being asked to find £2 to £5 per week towards council tax, even though their other benefits have not increased accordingly.
The method of challenging a council tax bill is immensely complex.
Each local authority has its own “council tax-reduction scheme,” which it should publish on its website.
That scheme sets out how the council tax will be reduced, on the basis of means-testing etc.
If you receive a council tax bill and you want to challenge it, you have to check your circumstances against the scheme published by your council.
If the council has got your details wrong and you should be entitled to a higher reduction, first of all complain to the council.
If the council refuses to change its decision or fails to reply within two months, you appeal to the valuation tribunal.
The appeal can only be on the basis that the council has wrongly applied its own scheme and your circumstances mean that you should be entitled to a greater reduction under the scheme.
The tribunal will not hear appeals arguing you cannot afford to pay the council tax.
Each council must also operate a council tax discretionary relief scheme or council tax hardship scheme and details should be in the published council tax-reduction scheme.
These are little-known provisions which give councils a discretion to reduce council tax liability in particular circumstances, usually applied to war pensioners or the very seriously disabled.
These discretionary relief schemes can help in the short-term to reduce council tax bills for those in real poverty.
If you simply can’t afford to pay your council tax but are not entitled to discretionary relief and you can’t argue that the council misapplied its own scheme, then you will eventually receive a summons to the magistrates’ court so that the council can obtain a liability order.
There are some technical arguments here – is the amount on the summons the correct amount, has the council applied the right time limits?
But, again, if the only reason why you are not paying your council tax is because you can’t afford to, the magistrates’ court has no discretion but to make a liability order. Poverty is not a defence.
In many ways, this is the new poll tax. Its aim is that everyone, even the poorest, should contribute to council tax.
It is implemented by local authorities – which may or may not have agreed with the cut depending on their political composition – and so local authorities take the political blame.
But, unlike the poll tax and much more like the bedroom tax, it is a tax on the poor.
It is a tax on people who were previously assessed as being so poor that they should receive 100 per cent discount on their council tax, through council tax benefit.
Garden Court Chambers, where I work, has launched Legal Action on Council Tax.
Our website contains detailed legal information as to how to appeal to a valuation tribunal and what happens when you are summonsed to the magistrate’s court.
No legal aid is available and so applicants have to represent themselves. Our hope is that the dissemination of information will give applicants the tools to make the argument and do just that.
Perhaps the best hope is that, like the poll tax, the collecting authorities and the courts will become so overwhelmed that government has to give in.
Liz Davies is a legal aid barrister specialising in housing law. She is chairwoman of the Haldane Society of Socialist Lawyers and writes this column in a personal capacity. For more information on council tax, click here.
This article was first published in the Morning Star.