Benefit payments may be cut for working age claimants under sweeping changes to the welfare system, a local authority has warned.
South Derbyshire District Council said that from April next year it will introduce a new local support scheme to replace the national system of council tax benefit, which is being abolished.
With the Government committed to funding only 90 per cent of the support it provided under the previous system, the authority is facing tough decisions on how it bridges the £500,000 shortfall in South Derbyshire.
It must decide who it will help to pay their council tax bills by January, in the knowledge that the system they draw up will not only have implications for the income received by the authority, Derbyshire County Council, the fire and police, but those already on low incomes.
Pensioners are currently the only group guaranteed to continue receiving the same level of benefit.
The district council is considering the following four options:
- To adopt the current national benefit scheme and absorb the cost against current and future budgets;
- To increase the council tax level and/or review discounts to make up the funding shortfall;
- Reduce benefit by a maximum of 30 per cent across all unprotected groups;
- Introduce a targeted reduction by changing the way benefit entitlement is calculated.
They have also asked officers to investigate what additional support could be given to single parents if they were affected, and to see if claimants coming off benefit could have payments reduced over eight weeks rather than a month.
The feasibility of charging extra council tax on properties which have stood empty for more than two years will also be examined. This could increase income by up to £100,000.
