Council tax benefits take-up call

The committee says there is a poor take-up of benefits

Council tax benefits are restrictive and too few people claim them, a cross-party group of MPs has warned.

Council tax benefit has the lowest take-up of any state benefit, leading the communities and local government committee to call for a shake-up.

The MPs say it is difficult to justify rules which leave 1.4 million adults living in poverty and yet still liable to pay the full council tax.

The Department for Work and Pensions said it would consider their views.

The benefits are meant to help people on lower incomes with their council tax bills.

But the committee says that the system is restrictive and that, as a result, there are too few claims.

Last year, nearly £2bn went unclaimed.

Proposed cuts

The MPs are also calling for the amount people can hold in savings before they lose entitlement to benefit to be raised from the current £16,000 to £50,000 or abolished altogether.

We call on government to urgently review its rules governing council tax benefit eligibility and entitlement to reduce the burden of council tax on low-income households Communities and local government committee

Committee chair Phyllis Starkey said it was "unacceptable that a significant number of households in poverty do not qualify for any reduction in their council tax liability".

"We call on government to urgently review its rules governing council tax benefit eligibility and entitlement to reduce the burden of council tax on low-income households," she added.

Last month, council leaders warned that proposed cuts to the council tax benefits service would hit the poorest hard.

That came after the Department for Work and Pensions told councils there will be a 5% cut in real terms for the service.

The Local Government Association (LGA) said this could result in a slower service and more of the poorest people in society not claiming their benefits.

It said the cuts would result in either a reduced benefits service or "substantial increases in council tax".

It said that, with just two-thirds of eligible people claiming their benefit entitlement and with a 10% fall in take-up since 1997, the amount left unclaimed could get worse.