Islington to keep council tax exemptions and discounts for low income residents

Cllr Gulcin Ozdemir: ‘this will make a noticeable difference’

Islington Council has announced it will maintain its council tax exemptions and discounts for the borough’s low income residents over the next year, after other local authorities move to scrap similar schemes.

At last Thursday’s full council meeting (12 December 2024), the Town Hall agreed unanimously to continue with its council tax support (CTS) scheme with “no major changes” made.

The Town Hall has offered council tax support for many years, but councillors say updates to the policy made in April this year made thousands of households exempt for the first time.

Cllr Gulcin Ozdemir (Labour party) said it was a “crucial part of the safety net we have to support our residents”.

“We throw a lot of stats and figures around in council meetings, and these may just seem like another number, but with the price of energy, food and bills increasing this will make a noticeable difference for those making hard choices between paying their bills and buying food,” she said.

A further 5,787 household are in receipt of 95 per cent council tax support, she added.

Cllr Ernestas Jegorovas-Armstrong (Green party) welcomed the move, thanking council officers but also paying tribute to the work of his colleague, Cllr Caroline Russell, who worked to “make sure this happen[ed]”.

“We know the massive impact that this makes,” he said.

The decision comes after it was reported last week that Greenwich Council in south London plans to remove its universal 100 per cent discount, first introduced in 2020, as part of a plan to save £1 million.

This follows Somerset Council’s decision in July to consult on proposed changes to its council tax discount scheme, which would see some of the county’s low-income residents lose their exemption.

The Town Hall’s policy document outlines changes in eligibility criteria for Islington residents, and includes three classes of reductions under Islington’s scheme:

Class 1: For pension credit-age individuals, who are protected under the Local Government Finance Act.

Class 2: For pension age people with a council tax liability on 1 April 2025, who are entitled to a minimum reduction of £100 per year, unless their liability is lower than this, in which case the reductions will match the person’s liability.

Class 3: For working-age residents, support is based on income bands and household composition, with reductions ranging from 100 per cent for the lowest incomes to 35 per cent, as income increases.

Alongside three classes of reductions are seven ‘bands’ based on income, household composition and other details.

Band 1, for example, covers “persons who are passported, not working” which refers to:

• People on legacy benefits receiving Personal Independence Payments (PIP) or Disability Living Allowance;
• People on Universal Credit with limited capability for work; and
• Single parents with zero earnings with a child aged under five years

Those in this band receive full exemption from council tax.

The document also states that income bands for class 3 may be updated every year in line with inflation, based on the consumer price index (CPI), and capped at a maximum increase of 10 per cent.

Provisions are also in place for people in exceptional circumstances.  Individuals who have had to move home due to domestic violence, for example, are exempt from paying the levy for up to 52 weeks.

According to Town Hall documents the number of registered council tax accounts in the borough is over 111,738, of which 25,188 are in receipt of council tax support, and 18,136 are working age households.

Council tax in England is set to rise by up to five per cent in April, meaning the average household faces an increase of more than £100 to next year’s council tax bill.