The headline finding is that 2.4 million low-income families will pay on average £138 more in council tax in 2013/14. Of these families, nearly 1.9 million currently pay nothing in council tax as they are considered too poor. Around 150,000 families will pay £300 or more a year extra in council tax.
Not every council is changing how Council Tax Benefit works – 58 of councils (18 per cent) are maintaining support at the same level. The majority, however, are requiring everyone, regardless of income, to pay some council tax. This minimum payment varies in amount from place to place (and can work quite differently depending on how it is implemented).
People in the same circumstances but in different council areas will now face different levels of support. For example, a family containing someone in receipt of Disability Living Allowance in the Wiltshire local council area will not be any worse off in April, as the disabled are a protected group in this scheme. But the same family living in the Derby Council area (for example, in a band A property, with a weekly income of £209) would be £180 a year worse off under the new local scheme.
This reform has been promoted as an important step for local democracy that allows for policy design that more effectively reflects local needs or priorities. A variety of different schemes may also help to determine the optimum combination of work incentives and protection of the poor.
The variety of different schemes will, however, add complexity and reduce the transparency of the council tax benefit system. The localisation of CTB also has serious implications for fairness, as claimants with the same needs and incomes are entitled to different amounts of support based on where they live, rather than their ability to pay.