What is the problem?

In the past residents on very low incomes did not have to pay Council Tax, but from 2016 onwards the Council has made even the poorest residents in the borough pay a minimum Council Tax charge unless they are pensioners or are receiving very specific disability benefits. Benefit rates have not been increased to cope with rising prices since 2016, and the poorest residents of the borough have struggled to pay for basic living expenses with no money over to pay Council Tax.

An example is a young single parent, Anita* who suffers from anxiety and depression and depends on means-tested benefits, which are not enough to cover basic living expenses for herself and her son. She already had debts when the Council started to charge her Council Tax in 2016 and struggled to find extra money to pay her monthly installments which are now £16. The result is that she has now been taken to court for Council Tax arrears of more than £250, and her total debts have risen to £6000. So the Council has not achieved the increase in Council Tax that it wanted but has greatly increased Anita’s anxiety and depression.

What we have done to tackle it

We campaigned vigorously against the imposition of the minimum Council Tax charge from the moment when it was first proposed and in October 2017 sent a report to the Council highlighting the financial hardship caused by the minimum charge and arguing for it to be scrapped or reduced. Our report was taken up by the Liberal Democrat opposition to the Council who made it a manifesto commitment in the Council elections in 2018 to remove any minimum charge if elected.

In the meantime residents on low incomes still had to pay the unaffordable minimum charge. However under legislation amended in 2012 local authorities can, if they want to, reduce or withdraw Council Tax charges for any residents who face exceptional financial hardship. *Diana provides a good example of the hardship involved. She is a single woman in her 50s, unemployed for a long time and dependent on Jobseekers’ Allowance of £73.58 a week. To avoid falling into debt on such a low income she had cut back on what most people would consider essential living expenses:

  • She bought no new clothes or shoes
  • She seldom had heating in her flat even in the middle of winter
  • She had no TV
  • She had no Oyster card and walked long distances in all weathers to avoid travel costs
  • She used her mobile phone only to receive calls, not to make them
  • She frequently applied to the Food Bank whenever she could not afford to buy food in order to pay her utility bills.

Having to pay an extra £15 a month for Council Tax forced her to cut back even further on heating and food at serious risk to her health.

In her case and several others we applied to the Council to exercise its discretion to allow these clients not to pay the minimum charge, drawing attention to the severe, additional hardship caused by the imposition of charge; but in all these cases the Council refused, without considering the evidence of hardship, on the grounds that it was central government’s responsibility to safeguard a safe minimum standard of living and not the Council’s responsibility to get involved. Where the evidence of exceptional hardship is particularly strong, with our clients’ support we have launched appeals to the Valuation Tribunal, which can overturn the Council’s decisions.

How we are responding to the newly elected Council

The newly elected administration in Richmond Council with a Liberal Democrat majority has accepted the recommendations of our report on this issue last year and is committed to producing a Council Tax scheme for next year (2019/20) that will abolish any level of Council Tax for the poorest residents in the borough. We will examine the Council’s proposals carefully when they are presented for consultation to make sure that they really do prevent residents on the lowest incomes being charged Council Tax.

In the meantime, residents on the lowest incomes in the borough will still be required to pay 15% of their full Council Tax liability until 31 March 2019.  The new administration wants to avoid dealing with applications for it to exercise discretion to reduce Council Tax under the legislation amended in 2012  and find a different way of assisting residents who cannot pay their Council Tax because of exceptional financial hardship. We are discussing several options with senior council officers.

*All names have been changed to protect clients’ confidentiality.

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