Consultation - Proposed Changes to the Council Tax Support Scheme

Overview

Each year Northumberland County Council must decide whether to change the Council Tax Support scheme for working age applicants in its area. There are no changes for Pension Age applicants as they are part of the national scheme. The Council is proposing changes to the Council Tax Support Scheme which will take effect from 1 April 2027.

Across the Council's area, currently around 24,200 Council Taxpayers receive Council Tax Support of which around 14,500 are of working age. Currently, the total cost of the scheme is around £27 million, with around £14.5 million supporting working age households. The proposed scheme costs are estimated at £26.9 million.

The Council currently chooses to spend £14.5million per year on Council Tax Support for working age households and is proposing relatively minor changes to its Council Tax Support Scheme, which will take effect from 1 April 2027.

We are legally required to consult on any proposed changes to the scheme, and are asking you to take part in this consultation to find out what you think about our proposed changes. We want to:

• Continue to support the most vulnerable households
• Standardise the approach to claimants receiving Carer’s Allowance/Employment and/or Support Allowance (ESA)
• Ensure that the scheme remains affordable

What is Council Tax Support?

Council Tax Support is a discount that helps people on low incomes pay their Council Tax bill. The level of discount is based on the income of the household. 

The Council currently operates an income banded Council Tax scheme for working-age people. Discounts are based on income and household size. The current income bands and discount percentages are shown in the table below:

Why are we making changes?

From 1 April 2026 the Council introduced an income banded Council Tax Support scheme that is easier to understand, reduces the costs of the overall scheme to the Council but still supports the most vulnerable.

After the scheme was introduced, the Council became aware of an anomaly where some claimants in receipt of separate payments for Universal Credit, Carer’s Allowance and/or ESA received less Council Tax Support than claimants with the equivalent weekly income who were paid these allowances as part of their Universal Credit payment.

What changes are the Council proposing?

The Council wishes to fix this anomaly, ensure that the scheme remains affordable and continue to provide 100% discount to those applicants with the lowest incomes.

To do this the Council is proposing to amend the scheme from 1 April 2027.

The areas we are consulting on are:

• Disregarding 100% of the Housing Element of Universal Credit
• Reducing the 90% discount band to 85%
• Reducing the 70% discount band to 65%
• Reducing the 40% discount band to 35%
• Retaining the 100% discount band for those on the lowest incomes.
• Retaining the 20% discount band

Are there any alternatives to changing the existing Council Tax Support Scheme?

We have considered other alternatives but do not think these are right for the following reasons:

Support Levels

A key priority remains to provide 100% discount to those on the lowest incomes such as the standard rate of Universal Credit.

We also need to ensure that the scheme remains affordable whilst fixing the Carer’s Allowance/ESA anomaly. The increased cost to do this has been offset by a small reduction to the discount awarded for bands 2, 3 and 4.

The positives are:

• We remove the current unfairness where recipients of Carer’s Allowance and/or ESA receive different levels of discount dependent of whether they are paid for their caring responsibilities or sickness within their Universal Credit or separately.
• Some claimants not affected by the Carer’s Allowance/ESA issue and who have other income in addition to Universal Credit may receive increased discount on their Council Tax as 100% of the housing element of Universal Credit will be disregarded.

The negative is that where the income of claimants falls into bands 2, 3 and 4, those claimants will see a reduction of 5% in their discount.