A scheme which offers a reduction in council tax to eligible residents is to be reviewed at a Cabinet meeting next week.
The Council Tax Support Scheme currently offers a 100% discount for working age households who are not in employment and a sliding scale of reductions from 75% to 10%, depending on the weekly income of those working.
Cabinet is being asked to approve a consultation on bringing the maximum level of discount for the 2025/26 scheme in line with other similar authorities. RBWM and Bracknell offer an 80% reduction, Wokingham 78% and Reading and West Berks 70%.
Calculations were done for discount options from 70% to 100% and the preferred option is to consult on moving to 70% for those not working. Discounts of 50% down to 5% would be offered for working people, depending on earnings.
Under the proposed discount of 70%, residents who previously paid nothing would pay an average of £468 per year. In other bands, the average reduction in discount would be £279.
Currently, there are 6,504 working age claimants and 2,542 pension age claimants. The change would only affect the working age claimants, which includes 1,019 who currently get a 100% discount and 5,485 who receive discounts between 75% and 10%.
Councillor Mabu Shaik, lead member for I.T, customer services, revenue and benefits, procurement and performance, said: “We have been offering the highest discount of authorities across Berkshire for some time, but we cannot continue to do so. We need to bring our levels in line with those of our neighbours and ensure the scheme continues to be viable and affordable in future. Though the discount will be reduced, it will still be of help to those who need it.
“We don’t take decisions such as this lightly, and we understand the impact this may have on residents, but to close the budget gap the council must look at all options, including the financial support provided under the CTS Scheme.
“While there is a proposed reduction in the support available, there will continue to be targeted support to households on the lowest income and a Council Tax Hardship Scheme will remain open for applications for exceptional support. Cabinet is asked to agree the Council Tax Hardship Scheme at £175,000.”
The aim is to make the scheme easier to understand and access. There will be a simpler application form, with less evidence required, meaning residents will know if they are eligible more quickly and will receive the discount more promptly.
Ultimately it will be easier for the council to administer and will result in fewer letters being sent out, as the council tax support will be clearly listed on a resident’s council tax bill and not sent separately.
For those who are working, only earnings will be used to calculate the council tax support. Benefits such as Personal Independence Payment (PIP) and Disability Living Allowance (DLA) will continue to be disregarded.
All those currently receiving payments under this scheme will receive a letter about the proposed changes.
If Cabinet agrees to consult on the new figures, the consultation will begin on 18 November and run until 29 December. This will be online, with paper copies available and planned drop-ins during the consultation period.
Residents will have six weeks to comment, and this will then be considered, before a new report goes back to Cabinet on 20 January.
The new scheme would be implemented from April.
The meeting will be on 14 November at 6pm, with the meeting papers available on the council’s website.
The council tax rate and the council budget for 2025/26 is being prepared now and is due to be finalised at the annual Budget Council meeting on 27 February.