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The way councils receive funding for housing benefit and council tax ...
The way councils receive funding for housing benefit and council tax

benefit is to be reformed.

For the first time funding for social and private tenants' housing

benefit will come from the same place - the Department for Work and

Pensions - as part of a wholesale reform aimed at making the process

more efficient.

The changes, which take place from April 2004, will be as follows:

- Subsidy will be paid at the rate of 100 per cent for all housing

and council tax benefits correctly paid by local authorities in

England, Wales and Scotland.

- The subsidy rate for properly backdated claims will increase from

50 per cent to 100 per cent.

- Councils will be subsidised for incorrect local authority

overpayments in a performance-related way, linked to an authority's

achievements against thresholds set by DWP.

- Local authorities will be paid a contribution towards the cost of

discretionary local schemes for war pensions disregards.

- A transitional protection scheme will apply, designed to cushion

the impact on local authorities of implementing the subsidy reform


- DWP aims to produce a new claim form combining subsidy claims for

housing benefit for social and private tenants and council tax


Housing benefit minister Chris Pond said: 'These reforms will mean a

simpler, more transparent system for local authorities and address

some of the problems of the past. Rationalising the subsidy system is

also an important part of our housing benefit reforms.

'I am particularly pleased that we will be able to make a

contribution towards the cost of local disregards for war pensions,

paying tribute to those who have served their country.'

Some elements of the subsidy system remain unchanged, including the

subsidy rates for claimant error, fraud and other overpayments.


1. The Local Government Act 2003 provides for Rent Rebates for so cial

tenants to be taken out of the Housing Revenue Account (HRA). As a

result, ministers have agreed to transfer responsibility for payment

of Rent Rebate subsidy from the ODPM and National Assembly for Wales to DWP from 2004/05.

2. Since DWP is already responsible for Rent Allowance and Council

Tax Benefit subsidy and Rent Rebate subsidy in Scotland, ministers

also agreed that the 5.5 per cent residual RA/CTB subsidy currently

paid to authorities through the Revenue Support Grant /Grant Aided

Expenditure in Scotland should transfer from ODPM, the Welsh Assembly

Government and Scottish Executive (SE) to DWP. All subsidy funding is

therefore now under the control of DWP from 2004/05.

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