Chelmsford City Council

Consultation on Local Council Tax Support scheme

Local Council Tax Support helps people on a low income to pay their Council Tax. The Government makes the rules about LCTS for pensioners, but we have some control over the rules for working age people. 

We want to know what you think we should do. There is an online consultation form for you to give us your views.

The consultation will close on 28 January 2019 . 

We want to make sure you to have all the information that you need to provide informed answers to this consultation. There is more information below about the current scheme and the changes that we could make. 

Take part now


The decisions we make about working age people affect the amount of money that the LCTS scheme pays out. 

The government gives us money to help pay for the LCTS scheme, but they have reduced this amount each year. The government’s funding is now not enough to fully pay for the scheme. 

We have to decide if we want to: 

  • top up the scheme with our own money so we still pay out the same amount
  • only fund the scheme with the government grant and pay out less to residents  

If we only fund the scheme with the grant money, working age people will receive less help and will have to pay more towards their Council Tax. 

If we make up the difference, we will have to find that money from somewhere else. This could mean increasing Council Tax, reducing some services, using money that it has saved or a combination of all of these things.

The current 2018/19 LCTS scheme

The key elements of the current 2018/19 LCTS scheme are:

  • We use the amount of Council Tax payable for a Band D property as the maximum for calculating how much help you can get. If a working age claimant’s Council Tax bill is more than this, they will not receive any extra help.  If your property is in Band A, B, C or D, we will use the actual amount you pay to work out how much help you can get.
  • All working age claimants must pay at least 23% of the Council Tax bill themselves.
  • Working age claimants with more than £6,000 in savings are not entitled to LCTS.
  • We will disregard between £15 and £35 per week of earned income when we calculate entitlement, depending on the household make-up.
  • We fully disregard Disability Living Allowance income.
  • We fully disregard War Pension income for disablement or bereavement.
  • We assume other adults in the property (such as grown-up children) will contribute towards Council Tax. We will reduce a claimant’s entitlement to LCTS depending on the other adults’ income.
  • You can’t claim support just because other adults in the property receive a low income (previously known as Second Adult Rebate).

You can read the full details of the current 2018/19 LCTS scheme.

The funding gap

The gap between the funding we receive and the cost of the LCTS scheme could be as much as £230,000 in 2018/19. 

The amounts for 2019/20 are difficult to estimate because we do not know yet: 

  • how much grant we will receive
  • if Council Tax charges will change
  • how many people will claim LCTS in 2019/20

If we increase our share of Council Tax to pay for this, we would have put up Council Tax by about 2%. That would equate to £4 per year for a Band D property. 

Alternatively, we could reduce our existing services by £230,000 per year, or take the money out of our savings.  

Some of our services are statutory, meaning we have to provide them by law. This might mean that we have to reduce non-statutory services by a greater amount.

Using money from the reserves may not be possible year after year, as reserves run out.

We do not intend to reduce the amount of money that the LCTS scheme pays out. However, we would like to know whether you agree with this approach.  

Possible changes to the 2019/20 scheme

We intend to make some minor changes to the LCTS scheme for 2019/20. None of them will reduce the amount of money paid out.

Change one

The first change relates to self-employed people.

Currently, we apply the ‘minimum income floor’ when working out the entitlement for some self-employed people. This applies if their income is less than what they would have earned working for 35 hours a week on national minimum wage.

We are proposing to change this for self-employed people who receive disability benefits or carer’s allowance. 

From 2019/20, the minimum income floor for these people will be the equivalent of working 16 hours at the national minimum wage. This means that self-employed people receiving disability benefits or carer’s allowance, who already qualify for LCTS, will receive more help with their Council Tax. It may also mean that some people will start to qualify for some help.

Change two

The second change relates to what we count as income when we calculate what people are entitled to.

We intend to fully disregard payments from: 

  • London Emergencies Trust
  • We Love Manchester Emergency Fund
  • Infected Blood Schemes
  • Thalidomide Health Grant
  • Bereavement Support

This will bring our LCTS scheme into line with the Housing Benefit scheme and will provide additional support for recipients.  

Change three

The third change is a technical one around when some someone's circumstances change. 

We intend to insert the following wording regarding the date that a change in earned income will take effect. 

This wording mirrors the Housing Benefit legislation to ensure consistency across both benefits.

New section 19.A.1 (1) 

"A claimant’s average weekly earnings from employment estimated pursuant to section 19 (Average weekly earnings of employed earners) and sections 25 and 26 (Earnings of employed earners and Calculation of net earnings of employed earners) shall be taken into account:

(a) in the case of a claim, on the date that the claim was made or treated as made and the first day of each benefit week thereafter, regardless of whether those earnings were actually received in that benefit week; 

(b) in the case of a claim or award where the claimant commences employment, the first day of the benefit week following the date the claimant commences that employment, and the first day of each benefit week thereafter, regardless of whether those earnings were actually received in that benefit week; or 

(c) in the case of a claim or award where the claimant’s average weekly earnings from employment change, the first day of the benefit week following the date of the change, and the beginning of each benefit week thereafter, regardless of whether those earnings were actually received in that benefit week."

Change four

The fourth change is a correction of a drafting error. 

Section 1.7 of the LCTS scheme provides a definition for people who will receive a reduction, assuming other criteria are met. 

Both Classes D and E require working age applicants to have capital below £6,000. Schedule 5 to the scheme states that applicants who receive income-based jobseekers allowance or income-related employment support allowance shall have their capital disregarded. 

This is clearly contrary to the stated scheme intention and paragraphs 5 and 6 to Schedule 5 will be deleted for clarity.

You can tell us what you think online now.

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