Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

JOB SEEKERS HIT BY CONFUSING BENEFITS

  • Comment
Charity wants reform to make work pay...
Charity wants reform to make work pay

By Mark Smulian

Council tax benefit is so complex that it deters people on low incomes from seeking work, the Joseph Rowntree Foundation has claimed.

As a result, moves to reform the benefit likely to feature in recommendations of the Lyons Inquiry into funding, 'should move beyond take-up to its negative impact on making work pay' the charity says.

Although it makes no suggestions as to how, it criticises how the benefit is only available for those on very low incomes, so most lose it when they start working.

Many reformers have emphasised the problems of people on low incomes - typically pensioners - who face high bills because their homes are in the upper rating bands. But the foundation's study finds there are only 181,000 such households, against 5.7m poorer people in the lowest three bands.

Too little attention has been paid to the tax's effects on people on low incomes who live in low-value homes, where some two million people struggle to pay the tax, it says. Council tax accounts for the equivalent of 4.9% of the lowest incomes, against just 1.7% for the wealthiest payers, it adds.

Michael Orton, of Warwick University's Institute for Employment Research, who conducted the study, interviewed payers who complained that council tax benefit was inadequate, bafflingly complex and clashed with other allowances so that they were worse off if they sought work.

One care worker interviewed said: 'I just feel the government [is] encouraging you on the one hand to go to work and to earn money, but then what they are giving you in tax credits, they are taking straight back off you in council tax and full rent.'

Local Government Association chairman Lord Bruce-Lockhart (Con) said councils were 'doing everything' to keep council tax down.

But he said this year's settlement from the government had 'included no funding for demographic change such as the increasing number of vulnerable elderly people requiring care'.

Stuart Adam, senior research economist at the Institute for Fiscal Studies, said: 'Council tax is regressive but it looks a lot less regressive when you include council tax benefit. But that is complex and people fall through the cracks.'

www.jrf.org.uk

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.