Council Tax in South Devon: there may be trouble ahead...

Thousands of the poorest South Devon households face a Council Tax rise in 2013 following welfare reforms.

Councils are to be put in charge of council tax benefits as the overall budget for rebates is reduced by 10 per cent. As a result, local authorities are now proposing to effectively end the 100 per cent council tax discount for low-income families.

As pensioners are to be protected against any reduction, many working-age claimants are likely to face an increase in Council Tax of hundreds of pounds.

Accordingly, all residents – except pensioners – will pay at least 25% or 30% of their bill from April if the plans put out for consultation by local councils go ahead.

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This will effect thousands of people. Council tax benefit is claimed by 17,890 people in Torbay, 6,480 in the South Hams, and 10,220 in Teignbridge.

Councils currently grant rebates to eligible people on low incomes and bill the Department for Work and Pensions. In the past, the unemployed, disabled, full-time Carers and people on low incomes would not have had to pay their full council tax. This is likely to change. For example, a £1,000 annual bill will mean paying at least £300 if councils decide the maximum rebate is 70%.

Torbay and Teignbridge Councils are now proposing charging everyone at least 25%, while Exeter and the South Hams are suggesting a 30% charge.

However, the Local Government Association says that poor communities will bear the brunt of the cuts – and many poor people will not be able to pay.

Indeed, Local Authorities have conceded that up to half of people on low incomes will refuse to pay and that there is little they can do about it.

The sums are so small – on average less than £5 a week – that councils are warning it "would in many cases be uneconomic to recover, with the costs of collection, including legal recovery costs, being higher than the bill".

The result is that councils are now budgeting for large losses and leaving the door open to widespread non-payment.