COUNCIL TAX BENEFIT RETHINK MAY HIT THOSE ON LOW INCOME

First published by: The Guardian

Chancellor's spending review targets half a billion pounds saving in a rebate shakeup to be implemented by local authorities

The chancellor's spending review has indicated plans for a Council Tax benefit rethink that may hit those on low incomes. The chancellor sought almost half a billion pounds from the Council Tax benefits bill by asking councils to draw up plans that would affect millions of people on low incomes. The rebate is paid to people on low incomes – including lone parents, jobseekers and around 3.5 million over-65s who are mostly on pension credit.

Council Tax benefits are not small: on average they are worth a little less than £900 a year and in most cases means the poor live in a property without having to pay Council Tax. George Osborne will not say who loses out from this welfare saving: that responsibility will fall on the shoulders of local authorities who will have to make changes to the benefits' rules, which are so complicated that only two-thirds of those entitled to the money claim it today.

Local authorities are to be given freedoms to make the savings, although academics warn this will simply be a way of shifting the blame from central to local government. At present councils pay out the benefit on behalf of the Department for Work and Pensions. Andy Sawford, chief executive of the Local Government Information Unit, said it was likely councils would probably choose to "stop paying to certain groups". "They could stop paying for long-term unemployed while paying for low-income married couples. It would be an interesting introduction of local diversity."

Sawford said councils could cut 10% from bills but that would mean chasing poor people for "a few pounds a week".

In a related move to save the taxpayer more than £200m,the government announced that single people aged 25 to 35 won't be able to claim housing benefit for a flat. Instead they can only claim for the cost of a single room in a shared house. Originally it applied to claimants under the age of 25 but this will be extended up to 35 – leaving many with few options beyond moving back home or moving in with flatmates.

Experts say that the move will affect "thousands of young people" as housing benefit is claimed by anyone who does not have "capital or savings over £16,000". "Over the age of 25 - I don't think many people want to be sharing," said Debbie Larner of the Chartered Institute of Housing. "I think 35 is a quite unreasonable cut-off point. The average age of home ownership is 37 so I cannot see how this helps with that."

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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