Consultation on the Council Tax Support Scheme 2025/26

Start date: 10th September 2024   
End date: 14th October 2024 

What are we consulting on? 

Council Tax Support affects all council taxpayers in Liverpool, including those who do not receive it. It is a discount which helps around a third of our households on low incomes with their council tax bill. It affects the amount of council tax the council receives and has an impact on the amount of council tax that all households in the city pay.

As it is considered best practice to review Council Tax Support Schemes periodically, we are proposing to change its scheme and we need your views. Liverpool’s Council Tax Support Scheme has not been reviewed since it started in 2013, it is complicated to understand, does not allow households to budget for income changes and is costly to administer, impacting other services.

Welfare Benefits have changed over the last 11 years and the council has not kept up with these changes. We need a scheme that supports those on the lowest income, empowers residents to budget, is easy to understand, provides incentives for people moving into work and is future proofed.

There are two Council Tax Support Schemes. A national scheme with rules set by central government for those of pensionable age, and another for those of working-age where the rules are set locally.

The current working-age scheme is means tested where entitlement is calculated by comparing the money coming into a household with the amount the Government says the household needs to live on.

The council’s aim, through its proposed changes, is to simplify the rules so that people know how much their council tax bill will be reduced by, enabling them to budget. The proposed changes will also align with Universal Credit and provide some certainty for people moving into or out of work whilst continuing to provide support to those that need it most.

These proposals will only affect working-age people who get Council Tax Support. Those of pensionable age come under different rules and will not be affected.

We are proposing to change our Council Tax Support Scheme from 1st April 2025.  The proposed changes will:

• simplify the rules and make it easier for people to understand the scheme
• provide some certainty for people moving into or out of work
• only affect working-age people who get a Council Tax bill and get Council Tax Support - pensionable age people will not be affected

Our proposals

We would like your views on the following proposed changes to the Council Tax Support Scheme.

Option 1

Keep the existing Council Tax Support Scheme for working age households with no changes.

Option 2

Make limited changes to the Council Tax Support Scheme, including:

• Changing the maximum discount given.
• Simplifying deductions for the amount deducted from Council Tax Support for another adult living in the property.
• Providing a 12-month award so there is no need to report every change in income.
• Supporting people who move into work by allowing them to stay in the same band for 12 months.
• Capping the maximum discount to Council Tax band C, for those in band D, E, F, G or H properties.
• Changing the length of time that an award can be backdated.

Option 3

Introduce a simple banded scheme based on net earnings only, aligning with Universal Credit, which gives a lower level of discount for those on higher net earnings.

It also includes:

• Simplifying non-dependant deductions (the amount deducted from Council Tax Support for another adult living in the property).
• Providing a 12-month award so there is no need to report every change in income.
• Supporting people who move into work by allowing them to stay in the same band for 12 months.
• Capping the maximum discount to Council Tax band C, for those in band D, E, F, G or H properties.
• Changing the length of time that an award can be backdated.

Option 4

Introducing a simple income band scheme based on net earnings and household composition, aligning with Universal Credit. 

This option is designed to reflect the different needs of different types of household.

The scheme has four bands with the level of award, varying with net earnings and household composition. To reflect the different levels of need, the upper and lower limits of the net earnings bands will be different for different types of household, such as single people, couples, or households with children.

For couples, the upper and lower limits in the net earning bands will be extended by £50 per week. For households with children, the upper and lower limits to the net earnings bands will be extended by £25 per child per week, with no limit on the number of child additions.

It also includes:

• Simplifying non-dependant deductions (the amount deducted from Council Tax Support for another adult living in the property).
• Providing a 12-month award so there is no need to report every change in income.
• Supporting people who move into work by allowing them to stay in the same band for 12 months.
• Capping the maximum discount to Council Tax band C, for those in band D, E, F, G or H properties.
• Changing the length of time that an award can be backdated.

How to comment 

This consultation is open to residents of the Liverpool City Council area. We'd like to hear your views on the options provided above. Please fill in our quick online survey using the button below.

Start the Council Tax Support Scheme survey

What happens to my views?

Your comments may be included in the consultation report given to the political Cabinet and full Council meeting and published on this website, but your name and details will not appear next to them.

All comments will be kept solely for the purposes of this consultation and will be destroyed 12 months after it closes. Find out more about how the council stores and processes your data.

What happens next? 

Following consultation, a report will be sent to a full Council meeting to make a final decision in January 2025.

Further information 

If you have any questions about this consultation, please email counciltaxsupportsurvey.gov.uk.