Cabinet approves consultation on extra support through council tax reduction scheme

The proposed new council tax reduction scheme, which provides support to the lowest income households in the borough, will be easier to administer and simpler to claim. Most importantly, it will increase the maximum amount of support available to claimants from 85 per cent of their council tax bill to 100 per cent, meaning some households with the very lowest incomes will not have to pay any council tax at all.
 
The proposed changes will also simplify the way that claims are made for households who also claim Universal Credit. Due to the way that Universal Credit works, under the current scheme minor changes during the year in the amount of Universal Credit claimed trigger a review of council tax reduction, leading to confusion on the amount of council tax due. The new scheme will introduce discount bands, which will lead to fewer changes in the support provided by the council tax reduction scheme during the year.
 
Under the proposed scheme, carers and disability benefits and war pensions will continue to be disregarded when calculating a claimant’s income.
 
Modelling of the effects of the new scheme show that around 84 per cent of claimants – or about 2770 households – will be better off under the new scheme and around 5 per cent will be worse off, with 11 per cent seeing no change. It is proposed that the new scheme will include provisions to award exceptional hardship payments which will be available for households who will be worse off, should they need it.
 
Cllr Ish Mistry, Deputy Leader of Rugby Borough Council and portfolio holder for Finance and Performance, Legal and Governance, said: “While the current council tax reduction scheme has been in place for the last ten years, it is difficult for residents to understand and complex and time-consuming for us to administer.
 
“The new, simplified system will provide more support to eligible residents and reduce significantly the number of changes to an award during the year. Most eligible households will be better off and our council tax team will have to issue many fewer updated council tax bills freeing up time for them to spend on other enquiries.
 
“I look forward to seeing what residents and partners think of the proposals.”
 
Cllr Bill Lewis, Rugby Borough Council Liberal Democrat spokesperson for Finance and Performance, Legal and Governance, said: "Supporting our most vulnerable residents is key. Providing a simplified system, allowing residents more certainty on their bills is also important.

"We welcome this chance to consult with our residents to see if this new council tax reduction scheme meets their needs."
 
Consultation on the proposed council tax reduction scheme opens on 8 October and will close on 19 November 2025. If taken forward, the proposals will be considered at a meeting of the full Council and would come into effect from 1 April 2026.
 
More information on the proposals and the consultation is available at www.rugby.gov.uk/counciltaxreduction.