The local authority said the existing system hasn’t been looked at since 2013
Liverpool Council is to sign off a significant change to how people across the city receive support with their council tax bills. With almost a quarter of a million active accounts, help worth more than £300m is handed out each year to more than a third of city households.
The cost of administering the scheme sets the city council back around £73m annually but there are fears government funding won’t stretch far enough, leaving a hole of £20m to fill in next year’s budget. Since its inception more than a decade ago, Liverpool Council’s support scheme has not been updated.
Ahead of the local authority setting its annual budget for 2025/26 and the Labour government continuing with the policy of allowing councils to increase rates by 5% each year without a referendum, officials are to reshape the scheme to be fit for purpose and meet the needs of communities.
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Council tax support is awarded as a reduction on a council taxpayers’ bill, like a discount, so the resident pays less. The scheme has two parts, a statutory scheme for pensioners and a non-statutory scheme for working age adults. The proposals put forward by the city council impact only on the non-statutory elements of the scheme and do not impact the statutory scheme for pensioners.
As a result, from next year, a simplified net earnings band model incorporating household composition would be used to calculate support handed out. A household’s net earned income will fall into an income band which will determine the level of support awarded.
Cllr Ruth Bennett, deputy leader and cabinet member for finance, told a committee of councillors last week how changes would allow the system to target in a more fair way and support those most in need.
Under the current scheme, a Liverpool resident liable for council tax could get up to 100% of their charge paid through the scheme if they are a pensioner, care leaver or Foster carer or up to 91.5% of the charge paid if they are of working age. Liverpool’s current council tax support scheme (CTSS) is means tested, based on old council tax benefit rules, making it very complex and difficult to understand.
The scheme does not enable households to budget for income changes and is costly to administer for the city. As part of the design review, officers considered how it could be improved for residents in receipt of Universal Credit (UC).
Cllr Bennett said: “It’s a realignment so it’s trying to make the system fairer, targeting those who are most in need and in lower banded properties.” The Belle Vale ward member said the current system “has flaws” including “an uncertainty, an unfairness and a lack of dignity” for people receiving multiple council tax bills.
The changes are expected to be signed off by cabinet members when they meet at Liverpool Town Hall on December 10.
