URL: https://moderngov.fareham.gov.uk/ieDecisionDetails.aspx?ID=2749

Decision Maker: Executive

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Purpose: The purpose of this report is to seek final confirmation of the recommendations to be made to Council on 20 February 2026, in respect of the proposed changes to the Council’s Local Council Tax Support Scheme with effect from 1st April 2026.   Each year the Council is required to review its Local Council Tax Support Scheme in accordance with the requirements of schedule 1A of the Local Government Finance Act 1992 and to either maintain the scheme or replace it.   Council Tax Support (CTS) was introduced from 1 April 2013 when it replaced the Central Government funded Council Tax Benefit scheme. The Government prescribes the scheme for pension age applicants, but a local scheme is adopted for working age applicants. The scheme allows the Council to reduce the Council Tax bill for low-income households based on their income. The cost of that reduction is born by all the preceptors.   The Fareham Borough Council Scheme has not been changed since 2013. However, it was flagged for a review as part of the Council’s Opportunities Plan 2025.   A major change is now proposed to move to a local banded scheme in line with many authorities in England, to reduce the significant administrative burden placed on the Council by the increase in the number of applicants receiving Universal Credit (UC).   This report outlines the proposals to change the scheme for working age applicants from 2026/27 and to implement the new scheme from 1 April 2026.  

Content: The purpose of this report is to seek final confirmation of the recommendations to be made to Council on 20 February 2026, in respect of the proposed changes to the Council’s Local Council Tax Support Scheme with effect from 1st April 2026.   Each year the Council is required to review its Local Council Tax Support Scheme in accordance with the requirements of schedule 1A of the Local Government Finance Act 1992 and to either maintain the scheme or replace it.   Council Tax Support (CTS) was introduced from 1 April 2013 when it replaced the Central Government funded Council Tax Benefit scheme. The Government prescribes the scheme for pension age applicants, but a local scheme is adopted for working age applicants. The scheme allows the Council to reduce the Council Tax bill for low-income households based on their income. The cost of that reduction is born by all the preceptors.   The Fareham Borough Council Scheme has not been changed since 2013. However, it was flagged for a review as part of the Council’s Opportunities Plan 2025.   A major change is now proposed to move to a local banded scheme in line with many authorities in England, to reduce the significant administrative burden placed on the Council by the increase in the number of applicants receiving Universal Credit (UC).   This report outlines the proposals to change the scheme for working age applicants from 2026/27 and to implement the new scheme from 1 April 2026.   RESOLVED that, subject to the replacement of the word ‘vulnerable’ in the second category in the bar chart at paragraph 12 of the report, the Executive recommends to Council the approval and implementation of a new income-banded Council Tax Support (CTS) Scheme for working-age applicants, to take effect from 1 April 2026.  The key Elements of the proposed scheme are:   Income Banded Scheme Structure   1.    Five discount bands: 100%, 75%, 50%, 25%, and Nil. 2.    Bands applied across the following household categories: Single, Couple, Single with one child, Couple with one child, Single with two or more children, Couple with two or more children. Support and Entitlement 3.    Increase maximum support for the lowest‑income households from 80% (Band C cap) to up to 100% of the full Council Tax bill. 4.    Retain the £16,000 capital limit. 5.    Remove tariff income on savings and capital. 6.    No non‑dependant deductions. Income and Disregards 7.    Apply a standard earnings disregard of £50 per week, regardless of hours worked. 8.    Childcare costs for non‑UC claimants to continue to be disregarded at current levels. 9.    Apply a £100 flat disability disregard where any household member has a disability. 10. Retain the 100% war pension disregard. Universal Credit (UC) Disregards - The following UC elements will be disregarded: 11. Housing element (pro‑rata or fully disregarded where maximum UC applies) 12. Carer’s element 13. Disabled child element 14. LCW and LCWRA elements Other Policy Points 15. No extended payments. 16. Allow backdating to 1 April of the year of claim where good cause is shown.

Date of Decision: February 2, 2026