Universal Credit, Council Tax Reduction scheme and rent arrears in Wales: interim report

The amendments aim to broadly maintain the level of support offered to citizens in Wales, and the numbers who are supported as households move to Universal Credit.

For households, the move to Universal Credit may have a significant impact on council tax reduction awards. This is primarily due to differences in the assessment of support under Universal Credit and under the legacy benefit systems. These differences do not affect those receiving maximum council tax reduction awards who have no income - they continue to receive awards based on 100% of council tax liability. However, for other households the move to Universal Credit can result in significant changes in council tax reduction.

The report estimates on average council tax reductions for employed households in receipt of Universal Credit will reduce by 12% while self-employed households will see a reduction in support of 80%.

Working households in receipt of Disability Living Allowance (DLA) or Personal Independence Payments (PIP) who are migrating into Universal Credit are estimated to see council tax support reduce by 22% on average due to the removal of disability premiums.

The Welsh Government is considering amending the current CTRS. In order to inform scheme design, the research has analysed the impact of six different scheme amendments. The six models were selected to meet one or both of the objectives of the Welsh Government. The objectives are to ensure fairness of support and to maintain the council tax reduction caseload for low-income households. The Welsh Government will consider the findings of these models in order to design three further models for inclusion in the final research report, due in Spring 2020.