Attacks on Welfare Lead to Poverty. Bring Back Council Tax Rebates Now!

How the Tories chose to hit the poor

Tom Clark. Guardian 2nd of July.

….frightening signs of hardship emerge, tied closely to the early benefit cuts. In line with the first restrictions on incapacity payments, there’s a sharp rise in poverty for disabled people. As the first housing benefit restrictions bit, on the breadline that adjusts for rising rent, 600,000 people sank into absolute poverty. Among children, so-called material deprivation – that is, families who can’t afford things such as birthday parties and warm winter coats – also edges up, as does the coalition’s new measure of “severe poverty”. And overall, the incomes of the poorest fifth are already faring worst.

But the true statistical picture of foodbank Britain will have to wait. For it was not until April 2013, at the very same time the 50p tax rate was chopped for the richest, that the poor were landed with a new household benefit cap which could leave children in London being raised on 62p a day. Poor families nationwide were then also faced with the reinvention of something very like the poll tax, as the national council tax rebate scheme was axed, and a three-year programme of holding benefits below inflation began. Clegg was just as craven in accepting this as he had been brave over indexing for living costs the year before.

Joyce says: “Just as benefits that outpaced wages led to reduced inequality immediately after the slump, government plans to reduce welfare spending in the next few years – while workers’ pay stabilises – are likely to push inequality back up.” The links between the coalition’s direct decisions and prospects for poverty are clear. There is no rise at all in hardship among pensioners, which fits with a whole series of special exemptions from the cuts. But a separate official survey revealed how overall taxation was rising for the poorest, even as it fell for others.

Council Tax Reduction replaced Council Tax Benefit in April 2013.

Each council runs its own scheme.

Having to pay a percentage of Council Tax – at rates which vary across the country – means, in reality, a massive cut in benefits.

More exactly, “Everyone of working age has to pay a minimum contribution of 8.5% of their Council Tax liability unless they are in a protected group. (War pensioners, war widow(er)s and people who receive Armed Forces compensation scheme payments will not have to pay the minimum contribution).”

That cash is not replaced by a rise in JSA and other benefits.

By October  2013 this was the picture,

Low-income families will see their council tax bills rise by up to £600 a year from April.

As a result of council tax benefit reform, No Clear Benefit shows that three-quarters of local authorities are set to demand increased payments from the 3.2 million poorest working-age households who currently pay either no council tax or a reduced charge. Families are facing a hike of more than 330 per cent in the most severe cases.

It comes as the government hands responsibility for council tax support to England’s 326 local authorities, along with a 10 per cent cut in funding for it. The government has insisted that pensioners are fully protected from any rise under the new localised system, known as council tax support, meaning that working-age households will bear the full brunt of the changes.

This was the result by October in the Capital.

Hundreds of London’s poorest and lowest-paid inhabitants attended a mass court hearing in south London on Friday, hoping to challenge non-payment of council tax orders issued by Southwark council, which had summonsed 5,800 people to attend

In  Essex those on benefits ended up having to pay 20% of Council Tax in 2013.

The result?

CHANGES to council tax rules have led to bailiffs being sent to 205 Colchester homes.

New benefits rules in April last year meant the majority of working age claimants now have to pay at least 20 per cent of their council tax.

The changes affected about 8,000 households in the borough which were asked to pay, on average, £169.

A Freedom of Information request has revealed 3,225 people found themselves in arrears at some point.

Of those affected, 40 per cent were receiving disability-related benefits and a further 40 per cent were single parents. Just 495 were employed.

The council subsequently sent out 1,500 summonses, followed by 1,235 liability orders, which it can do if the full amount is not paid within 14 days.

Of these cases, despite offers of help and a series of reminders, bailiffs were passed details of 205 residents who still owed cash.

Essex County Standard January 2014.

Ipswich Unemployed Action reported in April 2014,

Here’s the bad news – if you’re one of the 2.34 million low-income families who used to get council tax benefit, you will be paying on average £149 more in council tax this year than just over a year ago.

In some parts of the country, families once considered too poor to pay council tax face a bill of nearly £300 this year, according to a report by the New Policy Institute for the Joseph Rowntree Foundation.

Last April the government scrapped council tax benefit which helped people on low incomes – either those working for low wages or because they were on benefit.

It was replaced by council tax support and devolved down to local authorities to administer – crucially, though, with a significantly reduced budget.

Initially some councils did try not to impact some of the poorest families. A year on, the figures show more councils than ever have started to insist all working-age adults – pensioners are exempt – must pay something, regardless of their income.

 

Clark comments that “last week Duncan Smith published an anti-poverty “strategy” claiming that his welfare reforms would transform “the lives of the most vulnerable”. ”

Indeed it has.