A million families could lose more than 16 per cent of their council tax allowance if benefit is scrapped, warns TUC
More than a million families could lose over 16 per cent of their council tax allowance under government proposals to replace the universal Council Tax Benefit (CTB) with local authority-run schemes, says the TUC today (Wednesday).
Under the new plans, from 2013–14 the national CTB allowance would be scrapped and local authorities would decide who should pay less council tax and how much they should pay.
The government wants these changes to cut 10 per cent from CTB spending, but the TUC is concerned that parameters to the scheme – such as excluding pensioners and disabled people and ensuring that those in work are not worse off – mean that local authorities will have little option but to create significant hardship for families.
In total, 5.8 million people receive CTB. As pensioners and disabled people will be exempt from the changes and many in work will be ineligible to have their benefit cut, the TUC has calculated that those remaining groups of people will have to take at least a 16 per cent cut to bring the overall bill down by 10 per cent.
As 1.6 million families with children currently receive CTB it seems very likely that – even with the lowest estimates – more than one million families with children will face a cut of at least 16 per cent. This will inevitably increase the number of children living in poverty around the UK.
CTB for those under 65 is £15.74 a week, or £818 a year. Losing 10 per cent would bring the benefit down to £736 a year – and a 16 per cent cut would see it fall to just £687.
TUC general secretary Brendan Barber said: “Everyone who receives this benefit does so because they live at the very least on the verge of poverty.
“Excluding pensioners, disabled people and many in work from this 10 per cent cut will simply exacerbate the problem for those remaining. The planned reforms will force local authorities to push vulnerable families deeper into poverty and debt.
“The government is already set to miss its child poverty targets and this change will only make things worse.”
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