Council Tax Support Consultation

Have your say on the proposed new scheme for April 2025


Waltham Forest is proposing to change its Council Tax Support scheme from 1 April 2025. Council Tax Support is a reduction in the amount of Council Tax that working-age people on low income need to pay. In the context of the difficult financial challenges the Council is facing, the proposal for next year’s Council Tax Support scheme aims to balance introducing an affordable scheme for the Council, with targeting support to those that need it most.

The key characteristics of Waltham Forest’s existing Council Tax Support scheme and the proposed scheme starting 1 April 2025 can be viewed in the table below.


Our existing Council Tax Support scheme

from 1 April 2024 to 31 March 2025



The proposed Council Tax Support scheme

from 1 April 2025 to 31 March 2026


A means-tested scheme.


An income-banded scheme.

Working-age residents are entitled to support of up to a maximum of 85%.
Working-age residents would be entitled to support of up to a maximum of 85%, depending on a person's level of income, household composition and level of capital and whether they fall within one of the protected groups:
> households with limited capability to work;
> households with children aged 5 and under.

For other eligible working-age residents, support would be given up to a maximum of 57%, also depending on the their level of income, household composition and level of capital.

Net earnings can be further reduced when taking into consideration the number of hours worked and household composition.

Resident non-dependent adults are tiered within five levels for weekly contributions they’re expected to make towards the Council Tax: £0.00, £6.60, £13.15, £16.59 or £20.01.

Resident non-dependent adults are tiered within two levels for weekly contributions they’re expected to make towards Council Tax: £8.00 or £20.00.
A person or couple with capital more than £6,000.00 will not be eligible for a reduction.
A person or couple with capital of more than £6,000.00 will not be eligible for a reduction.

.


The proposed income bands are based on net earnings and can be viewed in the table in the Documents section, titled Income Bands.

Waltham Forest Council invites residents to participate in the consultation and will directly contact all working-age existing Council Tax Support recipients to encourage them to share their views on the proposed changes to the Council Tax Support scheme.

To reduce the potential impact on affected residents if the proposals are adopted, the findings from the consultation will be used to inform how we use our discretionary hardship funds to target those in need, as well as how we help residents through advice and guidance to maximise their income.

Please click here to complete the consultation questionnaire, but please make sure you read all of the information before taking part.


Background

Waltham Forest Council has outlined a series of missions to make the borough a fairer and more equal place to live and work. These missions are underpinned by a commitment that the Council operates under a sound financial framework, meaning that services are targeted appropriately and delivered effectively and efficiently, within the resources available.

As part of its commitment to operating under a sound financial footing, the Council is reviewing the provisions of its Council Tax Support scheme and are inviting you to comment on its proposals to make changes to the existing scheme.

Council Tax Support is a reduction in the amount of Council Tax people on low income have to pay the Council. It is funded by the Council.

There are two Council Tax Support schemes: one is for people above pension age and the other is for people who are below pension age (we call this ‘working age’).

The way in which Council Tax Support is calculated for pensioners is set nationally and the Council has no control about how the reduction is calculated. Therefore, Council Tax Support for pensioners is not part of this consultation.

The law says that the Council must produce a scheme for working-aged people and that it must reconsider the scheme each year. If the Council is proposing to make any changes to the scheme it must carry out a consultation. The Council has considered a number of proposals and is now consulting on making significant changes to the existing scheme.

Next year’s Council Tax Support scheme will come into effect in April 2025 and the findings from the consultation and the proposal for the financial year 2025/26 will be considered for decision by Full Council in December 2024.


Our current Council Tax Support scheme

The scheme was introduced on 1 April 2023 and is due to end on 31 March 2025. Currently, people of working age are entitled to support of up to a maximum of 85% of their Council Tax bill. This means that they must pay a minimum of 15 percent of their Council Tax bill themselves.

The current scheme is a ‘means-tested’ scheme. This means that a person’s income is compared to an amount their family is considered necessary to live on, often referred to as a ‘needs allowance’ or an ‘applicable amount’.

The principles underlying our current scheme can be viewed in the Documents section, titled Scheme Principles. These principles will be reviewed in light of the outcome of the consultation.


Why is the Council proposing to change the scheme?

We've seen a large increase in the cost of the Council Tax Support scheme. This is partly because on the 1 April 2023 we introduced a more generous scheme as a temporary measure to offset the worst effects of the cost-of-living crisis.

Next year we are predicting we will spend £20,610,00.00 on Council Tax Support if we don't implement the changes – that's an increase of more than £3.5 million compared with 2022/23, before we changed the scheme.

Over the last two years the Council has met the increased cost of the scheme by using income collected from non-Council Tax sources to meet the funding gap. Due to increased financial pressures the Council will find it difficult to continue doing so.

The Council has carefully considered the additional costs associated with increasing the level of support beyond that which could be achieved from using only Council Tax resources.

Alternative options considered

Other options were considered by the Council to bridge the funding gap instead of making changes to the current scheme. There are three ways in which any gap in the projected funding could be met by the Council without making any significant changes to the current scheme.

Increasing Council Tax

To fund a similar scheme to the current one, one option would be to propose an additional increase in Council Tax beyond that permitted in law before a referendum would have to take place. The Council does not consider this to be the best option – a referendum would mean the Council would incur a substantial additional expense and the level of increase would impose a further significant financial burden on residents.

Using Council reserves

The Council could use its reserves; however, the reserves are already at a lower level than they were when the Council introduced its current scheme. Placing further demands on its reserves to bridge the Council Tax Support funding gap could leave the Council in a more vulnerable financial position at a time when the Council needs to plan carefully across all of its budgets to achieve a balanced budget and to control spending. Using reserves to fund the Council Tax Support scheme would provide only a short-term solution and would increase the risk of us not being able to deal with an emergency effectively.

Reducing the funding available for Council services

Many of the services provided by the Council must be provided by law. These services include ones that are largely aimed at assisting the most disadvantaged residents such as adult social care, children’s services and housing services. Demand on these services, in most cases, are already beyond their allocated budget and reducing funding in these areas is not a viable option to support the scheme.

While we could, theoretically, make further changes to services which would cost roughly the same as the gap in funding the scheme, we would need to ensure that any further changes would not seriously compromise our ability to provide an appropriate level of service to residents and meet our statutory duties.

Keeping the scheme the same without finding alternative means of financing the gap

It's a legal requirement that the Council spends according to its financial means and provides services in ways it can afford in the long term. Taking no action now would put the Council in further financial difficulty and affect its ability to provide services.

Reductions to Council Tax Support are being looked at together with other ways the council can save money.


Discretionary fund

We want to make sure that Council Tax Support continues to be available to support our most financially disadvantaged residents now and in the future.

If these changes are implemented, the Council plans to provide additional assistance to reduce the impact of the most significant changes through the continuation of a discretionary fund. The findings from this consultation will be used to inform how we use our discretionary hardship funds to target those in need and how we help people maximise their incomes.


Further information

A more detailed explanation of the Council's proposals can be viewed in the Documents section, titled The Council’s proposals in detail. Please also see the Example scenarios document for theoretical examples of how people with different circumstances may be affected.


Take Part

We would like to hear your views on our proposal to change Waltham Forest's Council Tax Support scheme from 2025/26. Please complete our consultation questionnaire by clicking the link below:




Have your say on the proposed new scheme for April 2025


Waltham Forest is proposing to change its Council Tax Support scheme from 1 April 2025. Council Tax Support is a reduction in the amount of Council Tax that working-age people on low income need to pay. In the context of the difficult financial challenges the Council is facing, the proposal for next year’s Council Tax Support scheme aims to balance introducing an affordable scheme for the Council, with targeting support to those that need it most.

The key characteristics of Waltham Forest’s existing Council Tax Support scheme and the proposed scheme starting 1 April 2025 can be viewed in the table below.


Our existing Council Tax Support scheme

from 1 April 2024 to 31 March 2025



The proposed Council Tax Support scheme

from 1 April 2025 to 31 March 2026


A means-tested scheme.


An income-banded scheme.

Working-age residents are entitled to support of up to a maximum of 85%.
Working-age residents would be entitled to support of up to a maximum of 85%, depending on a person's level of income, household composition and level of capital and whether they fall within one of the protected groups:
> households with limited capability to work;
> households with children aged 5 and under.

For other eligible working-age residents, support would be given up to a maximum of 57%, also depending on the their level of income, household composition and level of capital.

Net earnings can be further reduced when taking into consideration the number of hours worked and household composition.

Resident non-dependent adults are tiered within five levels for weekly contributions they’re expected to make towards the Council Tax: £0.00, £6.60, £13.15, £16.59 or £20.01.

Resident non-dependent adults are tiered within two levels for weekly contributions they’re expected to make towards Council Tax: £8.00 or £20.00.
A person or couple with capital more than £6,000.00 will not be eligible for a reduction.
A person or couple with capital of more than £6,000.00 will not be eligible for a reduction.

.


The proposed income bands are based on net earnings and can be viewed in the table in the Documents section, titled Income Bands.

Waltham Forest Council invites residents to participate in the consultation and will directly contact all working-age existing Council Tax Support recipients to encourage them to share their views on the proposed changes to the Council Tax Support scheme.

To reduce the potential impact on affected residents if the proposals are adopted, the findings from the consultation will be used to inform how we use our discretionary hardship funds to target those in need, as well as how we help residents through advice and guidance to maximise their income.

Please click here to complete the consultation questionnaire, but please make sure you read all of the information before taking part.


Background

Waltham Forest Council has outlined a series of missions to make the borough a fairer and more equal place to live and work. These missions are underpinned by a commitment that the Council operates under a sound financial framework, meaning that services are targeted appropriately and delivered effectively and efficiently, within the resources available.

As part of its commitment to operating under a sound financial footing, the Council is reviewing the provisions of its Council Tax Support scheme and are inviting you to comment on its proposals to make changes to the existing scheme.

Council Tax Support is a reduction in the amount of Council Tax people on low income have to pay the Council. It is funded by the Council.

There are two Council Tax Support schemes: one is for people above pension age and the other is for people who are below pension age (we call this ‘working age’).

The way in which Council Tax Support is calculated for pensioners is set nationally and the Council has no control about how the reduction is calculated. Therefore, Council Tax Support for pensioners is not part of this consultation.

The law says that the Council must produce a scheme for working-aged people and that it must reconsider the scheme each year. If the Council is proposing to make any changes to the scheme it must carry out a consultation. The Council has considered a number of proposals and is now consulting on making significant changes to the existing scheme.

Next year’s Council Tax Support scheme will come into effect in April 2025 and the findings from the consultation and the proposal for the financial year 2025/26 will be considered for decision by Full Council in December 2024.


Our current Council Tax Support scheme

The scheme was introduced on 1 April 2023 and is due to end on 31 March 2025. Currently, people of working age are entitled to support of up to a maximum of 85% of their Council Tax bill. This means that they must pay a minimum of 15 percent of their Council Tax bill themselves.

The current scheme is a ‘means-tested’ scheme. This means that a person’s income is compared to an amount their family is considered necessary to live on, often referred to as a ‘needs allowance’ or an ‘applicable amount’.

The principles underlying our current scheme can be viewed in the Documents section, titled Scheme Principles. These principles will be reviewed in light of the outcome of the consultation.


Why is the Council proposing to change the scheme?

We've seen a large increase in the cost of the Council Tax Support scheme. This is partly because on the 1 April 2023 we introduced a more generous scheme as a temporary measure to offset the worst effects of the cost-of-living crisis.

Next year we are predicting we will spend £20,610,00.00 on Council Tax Support if we don't implement the changes – that's an increase of more than £3.5 million compared with 2022/23, before we changed the scheme.

Over the last two years the Council has met the increased cost of the scheme by using income collected from non-Council Tax sources to meet the funding gap. Due to increased financial pressures the Council will find it difficult to continue doing so.

The Council has carefully considered the additional costs associated with increasing the level of support beyond that which could be achieved from using only Council Tax resources.

Alternative options considered

Other options were considered by the Council to bridge the funding gap instead of making changes to the current scheme. There are three ways in which any gap in the projected funding could be met by the Council without making any significant changes to the current scheme.

Increasing Council Tax

To fund a similar scheme to the current one, one option would be to propose an additional increase in Council Tax beyond that permitted in law before a referendum would have to take place. The Council does not consider this to be the best option – a referendum would mean the Council would incur a substantial additional expense and the level of increase would impose a further significant financial burden on residents.

Using Council reserves

The Council could use its reserves; however, the reserves are already at a lower level than they were when the Council introduced its current scheme. Placing further demands on its reserves to bridge the Council Tax Support funding gap could leave the Council in a more vulnerable financial position at a time when the Council needs to plan carefully across all of its budgets to achieve a balanced budget and to control spending. Using reserves to fund the Council Tax Support scheme would provide only a short-term solution and would increase the risk of us not being able to deal with an emergency effectively.

Reducing the funding available for Council services

Many of the services provided by the Council must be provided by law. These services include ones that are largely aimed at assisting the most disadvantaged residents such as adult social care, children’s services and housing services. Demand on these services, in most cases, are already beyond their allocated budget and reducing funding in these areas is not a viable option to support the scheme.

While we could, theoretically, make further changes to services which would cost roughly the same as the gap in funding the scheme, we would need to ensure that any further changes would not seriously compromise our ability to provide an appropriate level of service to residents and meet our statutory duties.

Keeping the scheme the same without finding alternative means of financing the gap

It's a legal requirement that the Council spends according to its financial means and provides services in ways it can afford in the long term. Taking no action now would put the Council in further financial difficulty and affect its ability to provide services.

Reductions to Council Tax Support are being looked at together with other ways the council can save money.


Discretionary fund

We want to make sure that Council Tax Support continues to be available to support our most financially disadvantaged residents now and in the future.

If these changes are implemented, the Council plans to provide additional assistance to reduce the impact of the most significant changes through the continuation of a discretionary fund. The findings from this consultation will be used to inform how we use our discretionary hardship funds to target those in need and how we help people maximise their incomes.


Further information

A more detailed explanation of the Council's proposals can be viewed in the Documents section, titled The Council’s proposals in detail. Please also see the Example scenarios document for theoretical examples of how people with different circumstances may be affected.


Take Part

We would like to hear your views on our proposal to change Waltham Forest's Council Tax Support scheme from 2025/26. Please complete our consultation questionnaire by clicking the link below: