Council tax: 230,000 homes in Wales face first bill

About 230,000 households in Wales will pay at least some council tax for the first time if new regulations are approved by the Welsh assembly.

They may only have to pay a relatively small amount, but financial advice groups say it will add to pressure on their services.

The 330,000 households who currently get the benefit will be £67 worse off on average next year.

The Welsh government says 70% of them have not paid council tax before.

The assembly has been recalled from recess to vote on the regulations for a second time on 19 December.

A previous attempt to rush them through before Christmas was blocked by some opposition AMs.

The regulations need to be passed so councils can continue to offer the means-tested benefit in the next financial year, starting in April 2013.

If the regulations are not approved, then no benefit will be paid and everyone will have to meet their bills in full.

But even if they are approved, benefit recipients are likely to lose out because of a cut in funding.

Of the 330,000 households in Wales currently getting the benefit, the Welsh government says 70% - around 230,000 - will have to pay council tax for the first time.

Citizens Advice Cymru director Fran Targett said at the end of the last quarter the service had seen a 136% year-on-year increase in inquiries about benefits.

"There are people who never paid [council tax] before because of 100% benefit," she said.

"With these changes they will need to pay, so there's an issue about giving them assistance with financial management and budgeting and helping them to make these payments," she said.

£22m shortfall

"As people's incomes go down - these people in work and people on benefits - it's going to get tough for people to make these payments.

"The people we are talking about who are at that stage are already on the margin at or below poverty, and large numbers of them will be families with children - £67 when you are already at or below the poverty line is impossible to find."

Ministers hoped to get the regulations approved last Wednesday at what should have been the assembly's final full meeting of the year.

But they were accused of treating the assembly with contempt by tabling hundreds of pages of technical documents around 30 minutes before the vote took place.

The regulations are necessary because the UK government is handing over responsibility for the benefit to local councils. It is also cutting the amount of funding available by about 10%.

The Welsh government says it cannot afford to make up for the shortfall of £22m.

Documents accompanying the regulations say adjusting to the new system will leave councils with one-off costs, such as for IT and staff training, of between £1.5m and £1.9m.

Because of the increased number of first-time rate payers, collection rates could deteriorate, causing a further increase in costs.

Together with other reforms to welfare and legal aid, the documents warn the changes could put more pressure on advice services.

The Welsh government says its regulations are designed to avoid a postcode lottery so the amount of benefit people are entitled to is not dependent on where they live.

The decision to recall the assembly by Presiding Officer Rosemary Butler follows an agreement between First Minister Carwyn Jones, the Liberal Democrats and Plaid Cymru.

Mr Jones said inter-party talks failed last week because "the usual channels didn't work".

They had now agreed on a way forward after Plaid and the Lib Dem asked for sufficient time for scrutiny, he said.

"We've had council tax benefit thrown at us with a 10% cut in the budget for council tax. It's very difficult to find that money in-year particularly and for the financial years to come as well," Mr Jones said.

"We will continue to look at the situation, but it certainly isn't easy to plug a gap that the Treasury themselves have created."