Council tax reduction – minimum local residence rule

CPAG is representing three vulnerable women in financial need who have been charged a higher rate of council tax by their local authority because they only recently moved into the area. The judicial review case is one of the first test cases on the extent of local authority’s powers and duties in setting up council tax reduction schemes.

Until 2013, people on low income used to be able to claim help with paying their council tax through council tax benefit. In April 2013, the Government abolished council tax benefit and replaced it with local schemes set up and run by local authorities. Each local authority must introduce a scheme specifying reductions in council tax for residents who are in financial need.

When Sandwell Council introduced its scheme, it included a rule, without prior consultation, excluding anyone from claiming a reduction in their council tax who has not lived in the borough continuously for the last two years. As a result, anyone who has recently moved into Sandwell borough must pay the full rate of council tax regardless of their income or ability to pay.

The Claimants are three vulnerable women who were living in a neighbouring borough, but lost their homes and had to move into Sandwell for compelling reasons. One left to escape domestic violence; another had to move following a bereavement; and the third was hospitalised after attempting suicide. Two of the women were originally born in Sandwell and have close relatives living there. They have all been refused a reduction because they do not meet Sandwell’s two year residency rule and are being forced to pay the full rate of council tax, which they cannot afford to pay. One of the Claimants has been threatened with bailiffs.

CPAG is arguing that the two year residency rule in Sandwell’s council tax reduction scheme is unlawful under the Local Government and Finance Act 1992 and under anti-discrimination laws and that Sandwell Council failed to consult properly or comply with its equality duties.

The case will be heard in the High Court in Birmingham on 23 and 24 July 2014.