Decision details

The purpose of the report sought Executive approval to change the, recently confirmed, Exceptional Hardship Fund policy. This would enable the Council to ensure recipients of Council Tax Reduction were not adversely affected by an increase in income following the removal of the two-child restriction which had previously applied within Universal Credit. 

ORDERED that Executive:

1.     APPROVES a time-limited change (2026/27 financial year only) to the Exceptional Hardship Fund - Section 13A (1) (a) policy which was approved at Executive on 4 February 2026.

Members were advised that this change would extend eligibility to Council Tax Reduction (CTR) claimants on the basis of their increased income from Universal Credit due to the removal of the two-child restriction, to enable individual council tax bills to remain unaffected, with automatic awards to be made.

REASONS

The decision to extend eligibility was required if the Council’s intention was to ensure that there was no detriment to claimants of CTR who would otherwise benefit from additional household income to be made available by Government through Universal Credit due to the removal of the two-child restriction which had previously generally applied.

The cost of extending eligibility under the Exceptional Hardship Fund - Section 13A (1) (a) Policy was offset, to a substantial extent, by increased council tax revenue because the value of CTR awards for the claimants affected would be reduced. The impact from increased household income would commonly be a lower rate of individual entitlement under the CTR scheme.

Avoiding the requirement for individual applications would reduce the administrative effort required in arranging for them to be made and decided. A standard approach that enabled individual council tax bills to remain unaffected should have reduced the level of contact with the Resident and Business Support Service from affected claimants and avoided the need for more than one council tax bill to be issued associated with the income change. 

OPTIONS

The Council could have taken no action to provide additional support, which would have meant more council tax revenue would become payable due to the reduction in individual CTR claimants’ entitlements.

Those claimants would have borne the cost of the larger council tax bills and met it from the additional income the government had announced would be received through Universal Credit.

The perception could have been the Council was not serious about reducing poverty, particularly for families with children, and was taking financial advantage from the changed circumstances.

It was possible that a sum at a lesser rate than the full amount lost in CTR could have been awarded from the Exceptional Hardship Fund, but an additional level of complexity would be introduced for which a substantial amount of work might have been required to understand the range of consequences that would result and to then implement. The interplay between the CTR scheme income ranges and associated CTR award rates created the possibility that some households could have increased amount of council tax to pay if the full amount were not credited.