A significant reform in the council tax system will extend the timeframe for households to catch up on missed payments. Currently, individuals can become responsible for the entire year’s council tax bill just a couple of weeks after missing a monthly payment. However, the new changes will grant households a 63-day period, approximately two months, to settle any outstanding payments, with administrative costs limited to £100.
Moreover, the process to claim discounts for vulnerable individuals will be simplified. A universal application system will be introduced for the “Severe Mental Impairment” discount, which can potentially eliminate council tax bills altogether. This discount will also be renamed “Significant Cognitive Impairment” to align with the terminology used in Wales.
Eligibility for the discount is not explicitly defined but may include individuals with conditions such as dementia, severe learning disabilities, multiple sclerosis, or those who have suffered a stroke. Certification from a doctor confirming the condition will be required to qualify for the discount.
Additionally, the government will default council tax billing to a 12-month period instead of the current ten months. This adjustment aims to assist households in spreading the cost of payments over a longer duration. However, councils will still offer the option to pay over ten months if preferred, as the current system divides payments into ten monthly installments from April to January each year.
Consumer advocate Martin Lewis, known for advocating changes in council debt collection practices, expressed support for the reforms, emphasizing the need to address the aggressive nature of council tax debt collection. Minister for Local Government Alison McGovern highlighted the importance of modernizing the council tax system to better accommodate the needs of all individuals, including ensuring accessibility to entitled discounts and eliminating harsh enforcement tactics.
Local Government Secretary Steve Reed echoed the sentiment, emphasizing the move towards fairer treatment for families struggling with council tax payments. He acknowledged the efforts of Martin Lewis and his charity in raising awareness about the challenges faced by many individuals in dealing with council tax issues.
