Devil’s in the detail

You might think that £200 is worth, well, £200. But
chancellor Gordon Brown’s recent Budget pronouncement on council
tax represents a challenge to this reasonable assumption. He told
the House of Commons: “We will pay to every pensioner household –
65 and over and paying council tax – a council tax refund of
£200.”

A fairly simple headline-grabbing statement, you would think.
Sorry, but no. When welfare rights advisers unpicked the full
details of the announcement, they came up with a payment system of
staggering complexity.

The £200 payment will only be paid to those who are aged 65
on or before 25 September 2005 and not getting the guarantee part
of pension credit. The logic, presumably, is that those pensioners
who are getting guarantee credit should already be getting all
their council tax paid, so don’t need the £200.

The date for the cut-off is consistent with the winter fuel
payment. That’s rough justice for those who turn 65 on 26 September
or later (especially as payment won’t be made until December 2005,
by which time some of the non-receivers will have reached 65
anyway).

People who live in a care home who fulfil those conditions will
get the payment but at the rate of £100 not £200. The
£200 payment will be made to a single person or two people who
share living accommodation. In other words a couple will get
£200, not £200 each.

Bizarrely, pensioners who fulfil these criteria will still get
the payment even if:

• They get partial or full council tax benefit (but not if they
  get the guarantee part of pension credit as well), or
• They share a home with a separate householder such as a
  grown-up child. They will get the payment even if the householder
  pays no council tax – for example, if they receive 100 per cent
  council tax benefit.

If all that wasn’t complicated enough, there is a separate
council tax payment of £50 for people over 70, announced in
the pre-Budget report in December 2004. That payment has been
included into the £200 for those who qualify for the higher
payment.

So that means that pensioners who don’t get the £200
payment will generally get the £50 payment, but only if they
are over 70. The people who will get the £50 payment are those
who are not entitled to the £200 payment (that is, those
getting guarantee part of pension credit) and are over 70 on or
before 25 September 2005.

People in a care home who fulfil those two conditions will be
paid the £50 in full. As above, a couple will get £50,
not £50 each.

These payments – whether £200, £100 or £50 – will
be paid in early December 2005 at the same time as the winter fuel
payment.

With the combination of winter fuel payment and council tax
payment, some pensioners will get £500 in one payment. And in
one final quirk which I’m sure Gordon Brown knew nothing about –
Baroness Thatcher turns 80 on 13 October 2005, so will only get 2 x
£200 payments, not the full jackpot of £500.

• Thanks to Paul Lewis of Radio 4 Moneybox for the research in
  this article.

Gary Vaux is head of money advice, Hertfordshire
Council. He is unable to answer queries by post or telephone. If
you have a question to be answered please write to him c/o
Community Care.