NO TAKERS FOR COUNCIL TAX BENEFITS

First published by: This is Money

HEFTIER Council Tax bills will be going out in the next few weeks - with the amount rising by up to five times the rate of inflation.

But many struggling households, particularly pensioners, are missing out on Council Tax benefit (CTB) which could cover all or some of their bills. CTB is one of the most under-claimed benefits. Fewer than half the home owners who are eligible claim it, according to Age Concern.

'Up to £770 million in Council Tax benefit for older people is lying unclaimed every year and up to 1.7m pensioner households are missing out. By making a claim the average pensioner's Council Tax bill would be cut by around £425 a year,' says Age Concern's director-general, Gordon Lishman.

This week sees the Work and Pensions minister, launch a campaign to encourage pensioners to claim the benefit. It comes within days of 83-yearold Council Tax rebel Elizabeth Winkfield hitting the headlines because she is willing to go to prison rather than pay an extra £93.91 in Council Tax.

And anti-Council Tax campaigners say the minister's approach is misguided and patronising - because as a means- tested benefit it is complex and penalises those with savings.

How much Council Tax benefit you can claim depends on your income and savings. If you receive the guarantee part of the Pension Credit, you will usually get the maximum benefit - the whole of your bill paid for you. But this could be reduced if you have an adult son or daughter living with you as they could be expected to pay something towards it.

If you have savings of more than £16,000, you are not eligible - unless you are already receiving the guarantee part of the Pension Credit. Benefits are reduced for those with savings between £6,000 and £16,000.

For those age 60 or over, any benefit will fall by £1 a week for every £500 of savings - or part of £500 - over £6,000. So if you have £7,300 savings, you will be deemed to have extra income of £3 a week (£7,300 minus £6,000 equals £1,300, which is three units of £500 or part of £500).

Savings include cash, money in bank or building society accounts, National Savings Certificates and accounts, Premium Bonds and shares. It does not include the value of your home. If you are under 60, you lose £1 for every £250 of savings.

Next you need to compare your income - including your pension but not income from savings - with the sum the Government deems necessary to cover basic living costs. This 'applicable amount' is usually £116.90 a week for a single person or £175 for a couple over 65. If you are receiving the guarantee part of Pension Credit or your income is the same or less than the applicable amount, you will normally receive benefit to cover all the bill.

But if your income is more it will be scaled back. For every £1 of extra income you will lose 20p in benefit. If your income is £10 higher than the applicable amount, you will lose £2 from the maximum benefit. So if your Council Tax bill is £15 a week, your benefit will be scaled down to £13.

Age Concern's Factsheet 21, The Council Tax and Older People, is available free from 0800 00 99 66 or go to www.ageconcern.co.uk.Your local Citizens' Advice Bureau (number in your local phone book) can help you make a claim.

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