Council tax benefit reforms will hit working-age adults in poverty

Council tax benefit reforms will cut the original amounts available by 10%, leaving working-age adults worse off.

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Chris Goulden is a programme manager for the Joseph Rowntree Foundation

Council tax benefit reforms will cut the original amounts available by 10%, leaving working-age adults worse off.

Research published today for the Joseph Rowntree Foundation by the Institute for Fiscal Studies highlights some of the problems and opportunities caused by the decision to localise council tax benefit (CTB) from 2013-14. As well as devolving administration of the benefit, the amounts available will be based on 90% of what would have been spent on CTB in each area.

The department for communities and local government has also said that pensioners – as well as some locally-defined vulnerable groups ­- will be protected from cuts because they are less able to raise their incomes. Governments in Scotland and Wales will be responsible for deciding how to deal with devolution of CTB. In each nation, the cuts are concentrated in more deprived areas (see Chart 1).

Chart 1: Average annual cut per dwelling by IMD quintile of LA:

JRF-IMD-chart
It is a decision that travels in the opposite direction to the major welfare reform of universal credit (UC), which is centralising benefits within a single wrapper under the charge of the department for work and pensions. While there are some sound reasons for localisation, given that it is a rebate of a local tax, it is likely to create headaches for claimants and for local administering agencies, as well as for central governments.

Not only is the 10% cut likely to affect people already in or close to poverty, the protection from this cut provided for pensioners means that working-age adults are hit much harder; on average losing almost a fifth of their current support and, in some areas of the country, up to a third.

At present, two out of three recipients are passported onto CTB based on entitlements to other benefits that are being phased out under UC. This is going to be difficult for councils to cope with in designing their own systems. An added complication is these systems will need to run alongside old benefits and UC for four years as UC is phased in.

 


See also:

Budget 2012: Breaking down the benefits bill 21 Mar 2012

Could the welfare bill signal the death of social housing? 22 Dec 2011

Council tax freeze is a tax cut for the rich 3 Oct 2011


 

Given all these complications, and the many other issues that councils have to worry about, it surely would have been much better to have incorporated CTB into UC in order to stick with its sensible guiding principles of simplification and making work pay.

Will there be a U-turn? Unlikely.

Chart Notes:

• IMD quintiles are derived by dividing LAs in each nation into 5 equal-sized groups according to their overall IMD score. Quintile group 1 contains the least-deprived fifth of LAs in each country, quintile group 2 the second least-deprived, and so on up to quintile group 5, which contains the most-deprived fifth.

• Source: Author’s calculations using DWP (2010), VOA (2012) and Scottish Assessors Association (2012). See report for details.

 


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42 Responses to “Council tax benefit reforms will hit working-age adults in poverty”

  1. Amanda Ramsay

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  2. Abigail Scott Paul

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  3. 4D Research

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  4. Rabih Chaaban

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  5. Pulp Ark

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  6. Michael

    Council tax benefit reforms will hit working-age adults in poverty – http://t.co/cNvJfTnD Seems to be a trend with this Government

  7. TinaHG

    Council tax benefit reforms will hit working-age adults in poverty – http://t.co/cNvJfTnD Seems to be a trend with this Government

  8. Brian Tomkinson

    Council tax benefit reforms will hit working-age adults in poverty – http://t.co/cNvJfTnD Seems to be a trend with this Government

  9. Brian Tomkinson

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  10. BevR

    Council tax benefit reforms will hit working-age adults in poverty – http://t.co/cNvJfTnD Seems to be a trend with this Government

  11. Toni

    Council tax benefit reforms will hit working-age adults in poverty – http://t.co/cNvJfTnD Seems to be a trend with this Government

  12. BendyGirl

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/oxE0ZGze

  13. leftlinks

    Left Foot Forward – Council tax benefit reforms will hit working-age adults in poverty http://t.co/QFhNLQ0Y

  14. BevR

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  15. Jeni Parsons

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/oxE0ZGze

  16. BevR

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/PJAaBrWl

  17. Hens4Freedom

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/lfMsfxa9 #NewsClub

  18. Political Planet

    Council tax benefit reforms will hit working-age adults in poverty: Council tax benefit reforms will cut the ori… http://t.co/uaxP0IPz

  19. Chris Goulden (JRF)

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  20. Joseph Rowntree Fdn.

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  21. veritas justice

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/oxE0ZGze

  22. Danny Wright

    Council Tax Benefit reform will hit working-age adults: http://t.co/wLglr1xx < @Chris_Goulden analyses JRF report on @leftfootfwd. #localgov

  23. Kate Shannon

    Council Tax Benefit reform will hit working-age adults: http://t.co/wLglr1xx < @Chris_Goulden analyses JRF report on @leftfootfwd. #localgov

  24. Switch Training & Co

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  25. Lilacwheelz

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/oxE0ZGze

  26. Thomas Hemingford

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  27. Rebecca Spencer

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  28. Aaron.P.Barbour

    Nice to c u chris RT @leftfootfwd Council tax benefit reforms will hit working-age adults in poverty @Chris_Goulden: http://t.co/vSEYn0Oq

  29. BevR

    RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/PJAaBrWl

  30. Kevin Richards

    The working class being hit hardest RT @leftfootfwd: Council tax benefit reforms will hit working-age adults in poverty http://t.co/XyBzU12r

  31. Zero-credit

    Nice to c u chris RT @leftfootfwd Council tax benefit reforms will hit working-age adults in poverty @Chris_Goulden: http://t.co/vSEYn0Oq

  32. Nick

    Nice to c u chris RT @leftfootfwd Council tax benefit reforms will hit working-age adults in poverty @Chris_Goulden: http://t.co/vSEYn0Oq

  33. bc

    Nice to c u chris RT @leftfootfwd Council tax benefit reforms will hit working-age adults in poverty @Chris_Goulden: http://t.co/vSEYn0Oq

  34. heather

    Council tax benefit reforms will hit working-age adults in poverty, writes @Chris_Goulden: http://t.co/NRsE48fm

  35. Abigail Scott Paul

    RT @LGAcomms Poorest hit hardest by £500m council tax benefit cut http://t.co/5zBloVRI ->see @jrf_uk report on this http://t.co/b7QqTvwK

  36. Joseph Rowntree Fdn.

    RT @LGAcomms Poorest hit hardest by £500m council tax benefit cut http://t.co/5zBloVRI ->see @jrf_uk report on this http://t.co/b7QqTvwK

  37. Noel McDermott

    RT @LGAcomms Poorest hit hardest by £500m council tax benefit cut http://t.co/5zBloVRI ->see @jrf_uk report on this http://t.co/b7QqTvwK

  38. NantygloCF1

    RT @LGAcomms Poorest hit hardest by £500m council tax benefit cut http://t.co/5zBloVRI ->see @jrf_uk report on this http://t.co/b7QqTvwK

  39. Wigan John

    RT @LGAcomms Poorest hit hardest by £500m council tax benefit cut http://t.co/5zBloVRI ->see @jrf_uk report on this http://t.co/b7QqTvwK

  40. Martin Steel

    RT @LGAcomms Poorest hit hardest by £500m council tax benefit cut http://t.co/5zBloVRI ->see @jrf_uk report on this http://t.co/b7QqTvwK

  41. Paul Denham

    Effects of benefit reforms, in Plymouth and elsewhere: http://t.co/Z2AobG7A #PMQs

  42. A US perspective on tax credits and the politics of reform | Left Foot Forward

    […] Council tax benefit reforms will hit working-age adults in poverty 1 Jun […]

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