Option 3: Increasing non-dependent deductions
The table below shows the potential annual reduction in the cost of the Local Council Tax Support Scheme to Rotherham Council if it changed the scheme in line with Option 3.
| Option 3 | Claimants affected | Reduction or increase in cost of scheme | Amount of change |
|---|---|---|---|
| Increase deduction for non-dependant in work from £10 to £12.50 | 392 | Reduction in cost | £50,000 |
| Increase deduction for non-dependant out of work from £5 to £7.50 | 638 | Reduction in cost | £82,000 |
| Increase both by £2.50 | 960 | Reduction in cost | £130,000 |
Example 1
- The claimant is single and receives £90.80 per week Universal Credit. His grown-up son lives with him and also receives £90.80 Universal Credit.
- They live in a Band A property and without Local Council Tax Support, they would have to pay £27.52 per week.
- Under the current scheme they receive £20.18 per week Local Council Tax Support leaving them with £7.34 per week to pay (this includes a £5.00 non-dependent deduction for the son because the son is receiving Universal Credit).
- If the Council increased the non-dependent deduction for all non-dependents not in work to £7.50 per week, they would receive £17.68 per week Local Council Tax Support leaving them with £9.84 per week to pay.
- This means they would pay £2.50 per week more.
Example 2
- The claimant is a lone parent with a son aged three and is not in work. The claimant receives Universal Credit of £167.72, Child Benefit of £25.60 – a total income of £193.32. She also has a grown-up daughter living with her who earns £250.00 per week.
- They all live in a Band A property and without Local Council Tax Support the claimant would pay £27.52 per week.
- Under the current scheme she receives Local Council Tax Support of £15.18 per week which leaves £12.34 per week to pay (this includes a £10.00 per week non-dependent deduction in respect of the grown-up daughter).
- If the Council increased the non-dependent deduction to £12.50 per week for all working non-dependents, the claimant would receive £12.68 per week Local Council Tax Support leaving her with £14.84 per week to pay.
- This means she would pay £2.50 per week more.
