My mum missed out on council tax benefits for 18 years

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My 95-year-old mum missed out on council tax benefits for 18 years – how can she get her money back? Steve Webb replies


My mum aged 95 has received guaranteed pension credit for around 18 years.

More recently having moved into a care home social services have carried out a financial assessment of her income and outgoings.

From this assessment I have been advised that she should not have been paying council tax whilst on pension credit.

Pension credit: My 95-year-old mum missed out on council tax benefits for 18 years

Pension credit: My 95-year-old mum missed out on council tax benefits for 18 years

I am shocked that no one until this time has advised mum on this point. She has scrimped and saved to pay her bills.

The council have offered to return three months’ payments which is an insult.

As a vulnerable person what is her legal position in this situation. The council have advised me to appeal to the DWP.

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Steve Webb replies: Your mother’s experiences have highlighted a worrying gap in the safety net which is supposed to ensure that the poorest pensioners do not have to pay council tax bills.

Until 2013 there were two separate benefits to help people such as your mother, and both were administered centrally by the Department for Work and Pensions.

Pension credit provided a top-up to those with income below certain thresholds whilst council tax benefit covered some or all of the council tax of those on a low income.

An important feature of the system as it ran up to 2013 is that receipt of the ‘guarantee credit’ element of pension credit (as with your mother) was a ‘passport’ to getting your council tax paid in full via the council tax benefit system.

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

Because the two schemes were administered by the same central government department it was generally straightforward to ensure that pensioners on guarantee credit got their council tax paid in full.

In 2013 the big change was that the Great Britain-wide system of council tax benefit was abolished and replaced by a network of local ‘council tax reduction’ schemes run by each local authority.

The details of each of these schemes varies from place to place, but one requirement put on councils in designing these new schemes is that pensioners on guarantee credit should continue to receive 100 per cent rebates.

In theory therefore, when your mother’s local authority took on responsibility for meeting the costs of help with council tax she could have received a full rebate from them.

However, where I suspect things went wrong is that there is no automatic link between the DWP computer which runs the pension credit system and the computer system in any individual local authority which runs the new council tax reduction scheme.

This means that your mother’s local authority do not know automatically that she is on guarantee credit.

Unless she claims help with council tax then no benefit is paid, beyond the three months of ‘backdating’ which your local council has offered for a new claim.

In most cases elderly people on pension credit probably do contact their local authority in this situation as they would otherwise struggle to pay a council tax bill which could run into hundreds of pounds a year, even for a small house and with a single person discount.

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But it seems from your message that people can still slip through the net.

In terms of what you can do about your mother’s individual case, the options are quite limited I’m afraid.

The benefits system places the responsibility on the individual to claim, and it would be difficult to get compensation for any failure of the DWP (up to 2013) and your local council (since 2013) to make your mother aware of her potential entitlement.

However, if you could show that, for example, your local council *did* know that your mother was on guarantee credit but failed to act then you could possibly complain that she has lost out through their maladministration.

Likewise, you could complain to DWP via your MP about their failure to link information they held on your mother’s pension credit prior to 2013 with the council tax benefit system which they also ran.

I have had a look at the official figures on take-up of the old council tax benefit and these suggest that in 2009/10 (when DWP was still responsible) take-up by pensioners was under 60 per cent of those who were entitled.

Unfortunately, there are no figures on take-up of the new system of local council tax help, but it seems highly likely that the take-up rate is even lower than when the system was run centrally.

Your mother’s case is therefore undoubtedly part of a much larger issue and a very worrying one.

DWP and local authorities need to act urgently to promote much greater awareness that help with council tax bills is available but requires a claim to be made to the local council, even if you are in receipt of DWP benefits.

Indeed, I would argue that there needs to be data pooling between DWP and local authorities to ensure that everyone on guarantee credit can get their council tax bills paid in full.

Ask Steve Webb a pension question

Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.

He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.

Steve left the Department of Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock.

If you would like to ask Steve a question about pensions, please email him at [email protected]

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