Peterborough residents of working age could end up paying hundreds of pounds extra each year as they bear the brunt of massive cuts which could see council tax benefits slashed by up to 44 per cent.
Major reforms of the council tax benefit system will see responsibility for the setting and administration of benefits devolved from the Government to local authorities, including Peterborough City Council, from April 1 next year.
However, this comes with a 10 per cent reduction in the amount of cash the city is given for council tax benefits, which could potentially come to £2.8 million.
But with pensioners protected from any cuts to their benefits, the £2.8 million will have to be saved through cuts to those of working age, 18 to 64.
A major consultation will be launched by the council with residents, voluntary and community organisations to see how best to make these savings, but it will mean a reduction of at least 35 per cent in the working age council tax benefit budget.
But this could rise to 44 per cent provided there is a consensus that cuts should not affect those in receipt of disability premium, disabled child premium, enhanced disability premium and severe disability premium.
Council tax benefit is currently paid to people such as those on low incomes, the disabled, or those out of work and the news will come as a huge blow to those already struggling to make ends meet.
For example, if someone has a council tax bill of, for the sake of argument, £1,000 a year, and do not currently have to pay anything under the current system, the cuts to benefit budgets could see them paying £350 or £440 a year in the future.
Cllr David Seaton, cabinet member for resources, said: “Although the Government has told us to expect a ten per cent reduction, this assumes that the number of people claiming the benefit will reduce by next year.
“In many parts of the country, including Peterborough, we are seeing costs of benefit increasing so in effect the cut will be nearer 20 per cent.
“Coupled with this is the fact that the Government has told us that pensioners must have their Council Tax Benefit payments protected. It is for these reasons that working age claimants will have to pay a higher contribution.
“As a result of the reduction in funding from government there will be a shortfall that we will need to meet at a time when our resources are already stretched.
“We have spent a great deal of time exploring various options, developing a draft scheme, and considering who should get help and how much help they should receive under the new scheme.
“We have also had to be mindful of the fact pensioners are protected from the changes which means the reduction in Council Tax Benefit for those of working age will be higher.
“It is important people take the time to comment on the draft scheme so that we can take on board and fully understand their views.”
The council will officially launch its consultation on Tuesday, September 25, with people able to comment on the council website. A number of drop-in sessions will also be held.
More on this scheme: Localised Council Tax Support Scheme (PDF download) on Peterborough City Council website democracy.peterborough.gov.uk
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