Families fall into debt over Council Tax arrears

According to a new investigation by the Observer, hundreds of thousands of the poorest households in England are having their benefits cut every week because they are unable to pay their Council Tax bill.

This is causing some families to fall into a never-ending circle of debt where the council tax arrears (spanning years in some cases) are paid by having other benefits cut at the source (called an attachment) which just sends them further into poverty.

Only one year’s Council Tax debt at a time can be repaid by attachments to benefits, so if someone has council tax debts spanning multiple years, they end up with a separate attachment for each year, queued up one after the other.

The change in 2013 forced those on the lowest incomes to pay part of their Council Tax for the first time and as pensioners are protected by law, the entire burden has fallen on working-age people. Until the change, those on small or no incomes had some protection from paying the full tax under a national support scheme. Since then, councils in England have had to administer their own, locally devised schemes, with reduced funding from the government.

The result has been mass failure to pay Council Tax by those who would previously have been exempt, and a surge in cases where benefits are docked to make good on arrears. Data released under the Freedom of Information Act from 133 local authorities reveals that 190,198 households currently have money deducted from their benefits in this way.

Last week, Turn2us highlighted recent research by Citizens Advice linking mental health and debt, which showed that 54% of those people with a debt issue had a problem in at least one other area such as housing or employment.

Turn2us help

Our website has information on Council Tax Support which you may find useful. You can also use our free Benefits Calculator to check your benefits entitlements. Even if you have checked before, it is worth checking again, especially if there has been a change in your circumstances.

You can also check if you are eligible for a charitable grant or other support by using the Turn2us Grants Search. If you are worried about any issues and would like further advice, you can use the Turn2us Find an Adviser tool to locate face-to-face advice in your local area.

Source and further information: Observer news item: 360,000 families afflicted by Council Tax poverty trap

360,000 families afflicted by council tax poverty trap