Poorest facing tax rise as benefit cut
Changes to the benefits system will see council tax rises for thousands of low-income households from April.
The Government is to stop fully funding a benefit scheme which supports residents who need help paying their council tax bills and has told local authorities to run their own system.
Leicester City Council has now approved a scheme, but warned the poorest residents would be hit hard as it will see a 10 per cent cut in the £32 million it gets from the Government to meet the costs.
Council tax benefit is currently claimed by 40,000 people in the city.
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The council said the cut meant it would no longer be able to pay 100 per cent of the council tax of 25,000 claimants of working age.
They will get 80 per cent of the bill paid.
That works out as a weekly rise of about £4.35 for couples living in band B properties, £3.26 for a single person in a band B home.
About 16,000 people will be paying council tax for the first time.
Councillor Sarah Russell, assistant mayor for neighbourhood services, who proposed the new scheme, said: "This is one of the worst things I have ever had to do as a councillor.
"It does not affect pensioners, who are protected in the legislation, but it will hit some of the poorest people in the city who are working but earning a lower income – those who are on other benefits or receiving children's tax credits.
"£4.35 a week might not sound much but some families are already struggling with the rising cost of living.
"We have tried to come up with a system which reduces the impact on people but it has been hard.
"I would have liked to have pulled a rabbit out of the hat but there was no rabbit. There wasn't even a hat."
Other elements of the scheme include changing the amount of savings people can have before they are entitled to benefit.
Currently, the figure is £16,000. That will drop to £6,000.
The council has set £315,000 for a relief fund to help those who cannot afford their bills.
The cash will be issued on a discretionary basis. Coun Russell said all the people affected would be written to.
She said: "What I would say to people is that if they are struggling, they should call us as soon as they can so we can try to help in some way.
"That would usually be through a payment plan."
St Andrew's Tenants' Association chairman Angie Beales, 60, said: "I understand there is a need to save money on benefits but it will hit working families who don't have much money left when all their other costs have gone.
"It is worrying people on the estate and I don't think they properly understand why they will have to pay more."
The county's district councils are also having to devise their own council tax benefit schemes.