Households newly moved to Universal Credit are experiencing dramatic hikes in their council tax bills, sometimes amounting to thousands of pounds annually, following recent changes implemented by the Department for Work and Pensions (DWP). This surge affects many claimants as part of the DWP’s managed migration program, which is phasing out legacy benefits like Employment and Support Allowance (ESA).
Advocacy group Benefits and Work has reported that disabled individuals transitioned from ESA to Universal Credit have seen their council tax payments skyrocket. One claimant shared their frustration: “When I was on ESA, my council tax was £11 per month. It’s now £200.” Another claimant expressed confusion after receiving a council tax bill that increased by £64 per month with no clear explanation.
Council tax reductions or exemptions are available for low-income households and benefit recipients, but claimants must actively apply for a Council Tax Reduction (CTR) to take advantage of these programs. A recent court victory may offer hope, as two Universal Credit claimants won a High Court case against Three Rivers District Council. The council was required to refund council tax, pay £5,000 in damages, and cover legal costs.
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The DWP maintains that it provides Transitional Protection to ensure claimants moving onto Universal Credit do not suffer reduced benefit entitlements, helping safeguard their incomes. However, local authorities set their own council tax support schemes and policies, which vary considerably.
For example, East Devon District Council’s CTR policy acknowledges that, despite unchanged income, migrating to Universal Credit may lead to changes in council tax banding because Universal Credit is not a qualifying “passported” benefit under their scheme. Those who were receiving severe disability premiums prior to migration and experienced increased council tax bills are advised to seek legal guidance.