Did you know that for very low earners with disabilities council tax is a 50-75% and sometimes 100% tax on wages?

[Gtfc]

Local authorities now administer their own schemes for council tax support/relief and most of them class universal credit as income when calculating eligibility. This means they also class all the parts of universal credit relating to disability that previously were ring fenced, as income. A person in receipt of these and undertaking a small amount of regular work, earning say £100-400 a month, in many local authorities now is no longer eligible for council tax support and must pay the full bill, even if that full bill is the same as their total earnings.

Some local authorities are even counting PIP as income meaning that people eligible for PIP are having to spend their PIP on paying tax.

Surely this is a gross diversion from what these monies are supposed to be used for. What is even the point in having disability benefits if those benefits are spent on local tax?

This is the only population group in the UK that has a 100% tax rate

But it is income. Yes it is given due to the cost of being disabled, but it is still income. Pip is also not an out of work benefit. It is there for all. And disabled elements of UC give more income, but is still means tested.

I work and claim PIP, I would be outraged if my wages were income but their UC wasn't. Given that it is there to replace wages and is lost when wages are too high.

But workless people are spending their PIP on council tax. That's not right, surely?

SOME councils have withdrawn support. A number of the Reform councils are introducing this. Cowardly action by central government though to devolve the power to withdraw a benefit to local government but not give the powers to fund it through taxes.

And you'd really begrudge someone only able to work marginally, keeping some of that income from working?

Wow, I guess you do you but it doesn't sit right with me.

Apart from anything else, it's a massive disincentive in practical terms, for people who may be able to eventually work more, to do any work at all. Which as I understand it was the entire point of the move to universal credit - that we'd avoid having a cliff edge situation that would trap people in worklessness from fear of losing benefits.

Council tax is an insane amount of money to find in many local authority areas, compared to benefit level income, and because it's a tax there's no tolerance - just a court date with extra charges, if you don't pay. Even if they get the initial calculation wrong (very common) people have to pay up in the meantime while any reconsideration/appeal plays out on long timescales (the council is allowed eight weeks for an initial calculation in our LA, for eg, while the newly created taxpayer has just 14 days to settle any demand).

For people who already have few resources, the logical decision is to not work at all, even though they may be capable of doing something.

@Summerhillsquare it's really not only reform councils. This is across the board.

I don't think that disability benefits should be counted as income for the purposes of assessing eligibility for council tax support. Disability benefits are supposed to support people with the additional costs that are often incurred as a result of being disabled so they should be excluded from the income calculations so that everyone is on a level playing field.

However, I don't think it's helpful to present this as a tax on disabled people's earnings, as that doesn't really add anything to the argument and it just confuses the issue.

It's all part of the same mindset though - that disabled people are getting too much money and therefore it's okay to take it off them. It's nasty.

This is insane. Why would anyone work when the effective tax rate is 100%!? Absolute disincentive and like they've never heard of the Laffer curve.

Absolutely. It's recent too, since people had to move to universal credit. Previously they weren't liable for council tax or at least not in the large amounts they are now because they disability benefits didn't count as income. Nobody told these people that this would happen either and none of the DWP information states it. They just found out after they switched to universal credit.

What do we do?
Too many people are claiming benefits.Today I've had a very lovely heroin addict of over 20 years, who has a full time support worker. Someone with learning disabilities as their parents were close cousins claiming PIP, parents were never residents here.

What disability do you have OP

What surprises me is that there isnt a campaign similar to the one about the 'two child' rule to bring back a national Council Tax Support scheme.

The pre 2013 Council Tax benefit was the biggest benefit in terms of numbers claiming.

The original intention with Universal Credit was that recipients would get their Council Tax included in their award. So why wasnt it done

“What is even the point in having disability benefits if those benefits are spent on local tax?”

They are to pay for a person’s spending needs, for things such as food, or council tax, much like my wages are.

It is not. If you have children and your wage goes over £100,000 then you can have a marginal rate of over 100%.

@JohnofWessex that was the original intention, really? But the complete opposite is now happening.

It blows my mind that councils are doing this. The money is stated on government literature to be to cover additional costs incurred by disability, not to pay council tax. Surely it's a misuse of state money.

Our local council is one of the few that are now counting PIP as income. It has caused problems. The council is almost bankrupt and they can just make up their own rules. Ours is a labour run council.

PIP is different because it is supposed to cover the costs specifically associated with being disabled, on the basis that it is society's failure to accommodate disabled people that punishes them financially. So for example: taxis because public transport is inaccessible, home adaptations, specially tailored clothing. That's why it is not means tested, and why it is beyond the pale imo to class it as general income.

UC is a different matter.

If only there was a local election recently and people could vote on the policies that appealed to them the most......

Exactly

That's why so many of the schemes are so mean

Scotland and Wales have national schemes

It really is very disingenuous of this government to make such a big hoo-ha about disability benefits when they must know full well that people claiming those benefits are paying a disproportionately huge amount of tax, relative to income.

Disability benefits are absolutely NOT for things like food and council tax. It’s disgusting that they are ever included in an income calculation.

PIP is there to cover the additional costs of being disabled, over and above food and rent and council tax. Things like equipment, extra fuel and water costs, taxis, care needs etc The media would have you believe that all that stuff is handed out for free but it isn’t.

Are you suggesting that the person with learning disabilities should be penalised for their parents' actions?

The OP was not talking only about PIP. She wrote

“This means they also class all the parts of universal credit relating to disability that previously were ring fenced, as income.”

OP specifically mentions PIP in her opening post!

I know that LAs are increasingly treating PIP as income in their means testing eg for social care assessments and other discounts, and it is really unfair.

It would be helpful to see some actual examples of the figures being mentioned. I can kind of see where you’re coming from, but without concrete amounts it’s hard to understand the actual financial impact.