Regulations are being set up in Wales to avoid postcode lottery on benefits, but 330,000 households currently receive the tax benefits will be on average £67 worse off if approved on 19th December.
According to the Welsh Government, around 70% of these will be paying at least some council tax for the first time.
They may only have to pay a relatively small amount, but financial advice groups say it will add to the pressure already on their services.
The Welsh Government claims the regulations are designed to avoid a postcode lottery on the amount of benefits households receive, and will allow councils to continue to provide the means tested benefit in the next financial year, starting April 2013.
The regulations need to be passed before January so councils can continue to offer the means-tested benefit in the next financial year, starting in April 2013. If the regulations are not passed then no benefit will be paid and all households will have to meet their bills in full.
Citizens Advice Cymru director, Fran Targett, said at the end of the last quarter the service had seen a 136% year-on-year increase in inquiries about benefits.
There are people who never paid [council tax] before because of 100% benefit. With these changes they will need to pay, so there's an issue about giving them assistance with financial management and budgeting.
As people's incomes go down – these people in work and people on benefits – it's going to get tough for people to make these payments. [They] are at that stage are already on the margin at or below poverty, and large numbers of them will be families with children – £67 when you are already at or below the poverty line is impossible to find.
The UK Government have devolved it's responsibility for the council tax benefit to councils while cutting the funding available by 10%. The Welsh Government claims it cannot afford to make up the £22m shortfall, which will increased by the one-off costs for councils of setting up the new system, including around £1.5m on IT costs and £1.9m for staff training, as well as additional losses to cover low collection rates due to the high number of first-time rate payers.
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