Medway Council to change council tax rules to protect itself from legal challenges over tax technicality

In a meeting on 30 June, cabinet was recommended to prescribe that Medway Council, as a billing authority, exercise its power to determine a class of person, to reduce or remit council tax liability under S.13A(1)(c) and S.13A(7) of the Local Government Finance Act 1992 (the 1992 Act) where:

(1) any person, who -
(a) is liable for council tax in the authority’s area; and
(b) is entitled to an award of Universal Credit; and
(c) whose award of Universal Credit includes an amount identified as a transitional protection element.

(2) for the purposes of calculating the person’s income under this Scheme, any amount of Universal Credit attributable to a transitional protection element shall be disregarded in full.

Explaining the decision, the council said: “The council has the discretion to prescribe individuals and or certain classes of people and thus reduce their council tax liability.

By prescribing those in receipt of transitional protection to their universal credit benefit the Council is supporting families who may be experiencing financial strain, prevent Universal Credit recipients losing out and avoid possible legal challenges.”

The council’s cabinet agreed to create a new rule to disregard transitional protection element (TPE) payments when determining how much tax relief people on Universal Credit receive.

Further, the Cabinet agreed to delegate authority to the Chief Operating Officer, in consultation with the Leader of the Council, to prescribe classes of people under Section 13A(1)(c) Local Government Finance Act 1992.

A High Court decision in February declared Three Rivers District Council in Hertfordshire had acted unlawfully when counting TPE payments as income, which disqualified some residents from rates discounts.

Medway Council’s deputy leader, Cllr Teresa Murray (Lab), said: “This is a welcome simplification of the system, which was beginning to happen even before the legal determination, because it is common sense.

“It’s important to have clarity, particularly for those in receipt of TPE.

“Trying to treat TPE as income caused all sorts of problems, including throwing people into arrears unnecessarily.

“Migration from legacy benefits to Universal Credit has been going on for a long time and there are still people who are yet to migrate and so this change will help them and the council with that.”

Lottie Winson