Yesterday we published a new report with Z2K, which shows the impact that abolishing council tax benefit has had on low income Londoners. Still too poor to pay: three years of localised council tax support in London reveals that localising council tax support has led to increasing numbers of households receiving court summonses, falling into council tax arrears and being referred to bailiffs.
Betty*, aged 49, from Bow in London, knows what it’s like to fall into arrears. She is a catering assistant in a local school and is on a low income. Betty is currently subject to enforcement action by bailiffs on behalf of the London Borough of Tower Hamlets, for the recovery of around £1500 in council tax arrears.
We have a good relationship with Tower Hamlets council and welcome the efforts it has made in a number of areas to help low income families. In particular, it is one of the seven London boroughs that fully protects people on a low income from council tax - by offering them 100 per cent relief.
Betty was receiving council tax support up until mid-2014/15, when her daughter who used to live with her started working in a local nursery. This changed Betty’s situation and made her claim subject to a Non Dependent Deduction. As a result, Tower Hamlets calculated that she was entitled to no council tax support at all during 2015/16, which led to her falling into arrears. She subsequently received a letter through the post from bailiffs, informing her that she owed £1040.
Betty said: “I was really shocked to get the letter from the bailiffs. I rang them to talk to them, but they said they didn’t care and just wanted the money… The thing is although I work, I don’t earn a lot of money. I don’t see why I should have to pay more just because my daughter is working too!
“My daughter’s moved out now, and although my hours increased from 26 to 30 hours a week in January, that hardly makes any difference. Now I’m only getting £1 in council tax support from the council, and they’ve told me I need to pay nearly £100 a month from September to pay off my debt, plus another £122 in council tax. I can’t afford that! I’m trying to work out a payment plan with them before the bailiffs come round – I just hope they’ll listen to me.”
CPAG and Z2K are calling for central government to reinstate council tax support as a national benefit, providing up to 100 per cent support for people on low incomes. If council tax support remains localised, we are urging London boroughs to reinstate 100 per cent support for the poorest residents, following the lead of the seven councils that still maintain it. We are also urging boroughs to refrain from using bailiffs for collection of council tax, and instead engage with debtors and negotiate repayment plans to keep people out of court.
*Betty’s real name has been changed to protect her identity