Council tax support set to be increased for borough's lowest income households

The council has drawn up a new, streamlined council tax reduction scheme to simplify the application process and increase council tax discounts for the borough's lowest income households to up to 100 per cent.

A report to last night's (1 December) meeting of cabinet recommended introducing the new reduction scheme for the 2026/27 financial year - the first change to the scheme since its introduction 12 years ago.

Reduction schemes were introduced by the Government to support both low-income pensioners and working age applicants struggling to pay council tax.

While the Government sets the rules of the scheme for pensioners, councils set the criteria for the support working age applicants receive under the scheme.

And Cllr Ish Mistry, deputy leader of Rugby Borough Council and portfolio holder for finance and performance, legal and governance, said the council was determined to focus support on the borough's lowest income households.

Modelling of the new reduction scheme indicated 92 per cent of households currently receiving council tax reduction would receive more financial support, while 7.7 per cent would receive the same support.

The new scheme introduces discount 'bands' which take into account a household's weekly net income, size and number of dependents.

When calculating net income, the council disregards disability and carers benefits, war pensions, child benefit, child maintenance and a number of elements of Universal Credit.

Cllr Mistry said the streamlined scheme would be easier for residents to understand and easier for the council to administer - ending a complex application and administration process which had been further complicated in recent years by the rollout of Universal Credit.

"We know the cost of living presents a significant challenge for households across the borough, but it's only right we target our resources on supporting vulnerable households on the lowest incomes," Cllr Mistry said.

"By simplifying the reduction scheme, we can give households greater clarity on the amount of financial support likely to be received, streamline the application process and speed up the time it takes to process applications - in certain cases, approving applications from Universal Credit claimants automatically using data from the Department for Work and Pensions (DWP).

"This promises to make our most vulnerable households better off and deliver significant efficiency savings for the council."

Efficiency savings look set to cover the additional cost of the scheme for the council in 2026/27 (approximately £75,000), with proposed increases to council tax on empty properties in the borough set to fund the scheme thereafter.

Under the new scheme, residents facing significant financial challenges who do not meet the criteria for council tax reduction can apply for an exceptional hardship payment.

Cllr Bill Lewis, Rugby Borough Council's Liberal Democrat group spokesperson for finance and performance, legal and governance, said: "The new council tax reduction scheme benefits those in our community who most need financial assistance, further moving us towards a fairer society."

Full council looks set to make a decision on the new council tax reduction scheme at a meeting next Wednesday (10 December).