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.

 

Decision

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.