Too poor to pay

Post date: 
29 July 2015

Too poor to pay tracks the impact of the second year (2014-15) of localised council tax support schemes which replaced national council tax benefit in April 2013. Council tax support is for people on low incomes, in or out-of-work, and reduces the amount of their council tax bill they are liable for.

When the local schemes started up, funding was cut by 10 per cent. To plug the gap, many councils began demanding minimum payments of up to £380 per year from working age residents who had been deemed too poor to pay anything under the previous national scheme.

In 2014/15, 24 of 33 London boroughs continued to levy a minimum council tax charge on residents who had not been required to pay before localisation. Charges vary from 5 to 30 per cent of the full annual bill.

The report finds:

Councils report that almost 123,000 (122,749) low-income Londoners are currently in arrears on their council tax

More than 100,000 low-income Londoners (102,204) receiving council tax support were issued with a court summons in 2014/15 because they fell behind on payments

More than 12,000 council tax support claimants in the capital were referred to bailiffs in 2014/15

More than 71,000 council tax support claimants were charged £8.5 million in court costs on top of their arrears

CPAG and Z2K are calling for the reinstatement of a national, fully funded system of council tax benefit so that the lowest-income households are not liable for the tax. While a localised system still exists, they ask that all local authorities should either follow the example of the six London boroughs who have continued to cover council tax in full for their poorest residents or – at the very least – cut minimum payment to more affordable levels. They should also improve their collection procedures to protect their poorest residents from court costs and bailiffs.