Option 2: Changing the maximum level of Local Council Tax Support from the current 91.5 per cent
Under the current scheme an applicant can qualify for a maximum of 91.5 per cent of their Council Tax. Therefore, all working applicants are required to pay a minimum of 8.5 per cent towards their Council Tax.
An option is to change the maximum Local Council Tax Support from the current 91.5% by reducing the maximum award for example to 85%, 80%, 75% or by increasing for example to 95%.
Reducing the maximum award would reduce the cost of the system but increase the amount of Council Tax an applicant would have to pay.
Increasing the maximum award would increase the cost of the system but reduce the amount of Council Tax a claimant would have to pay.
The benefits of increasing the maximum support amount are:
- Working age households eligible for Local Council Tax Support would have less to pay.
- It is a simple alteration to the scheme which is easily understood.
- It may be considered fair because everyone is required to pay the same minimum percentage of their Council Tax liability. The actual amount they are required to pay would be based on their income and capital.
The drawbacks of increasing the maximum support amount are:
- It would increase the cost of the scheme for the Council which may result in cuts to other council services.
The benefits of reducing the maximum support amount are:
- It would reduce the cost of the scheme.
- It is a simple alteration to the scheme which is easily understood.
- It may be considered fair because everyone is required to pay the same minimum percentage of their Council Tax liability. The actual amount they are required to pay would be based on their income and capital.
The drawbacks of reducing the maximum support amount are:
- Working age households eligible for Local Council Tax Support would have more to pay.
- It could lead to an increase in administration costs to recover the increased additional Council Tax.
