Coronavirus (COVID-19): guidance for local authorities on pandemic support payments

Low income pandemic payment

Summary

1. It has been agreed that local authorities will provide a Low Income Pandemic Payment (LIPP) of £130, by the end of October 2021, for each household in receipt of Council Tax Reduction (CTR), and other households who are exempt from Council Tax or who have no liability as per below criteria.

2. It is estimated that around 550,000 households will be eligible for support through this measure. This includes approximately 500,000 households in receipt of CTR, and an estimated 50,000 households who are exempt from Council Tax.

Eligibility

3. Households are eligible to receive the payment if they satisfy the criteria for at least one day during the period between 1 April 2021– 30 April 2021.

4. The criteria is that they are in receipt of CTR, including Second Adult Rebate (SAR), or that they are exempt or have no liability for Council Tax on the following basis:

i all the occupants are under 18

ii all the occupants are care leavers

iii all the occupants are severely mentally impaired

iv the property is unoccupied because the resident has gone to someone else's home to provide care or the resident receives care elsewhere

v occupants are accessing Housing Support Service and/or living in temporary accommodation or a refuge

5. Eligibility for households living in dwellings exempt from Council Tax may require to be determined through other systems, for example housing records to identify individuals in temporary accommodation.

6. Reasonable steps should be taken to ensure a household receives no more than one payment, for example where:

a. a household moves to another local authority area within the payment period. In this instance the first local authority where the applicant was resident should make the payment;

b. a household moves address, within the same local authority, or receives an exemption during the period of eligibility.

c. a household splits. In this instance the total number of payments issued should not exceed the number of newly formed households.

7. Where a Council Tax dwelling contains more than one household for CTR purposes, who have joint and several liability for Council Tax, a payment should be made for each household in receipt of CTR in their own right, subject to the eligibility outlined above. This approach should be applied for groups who are exempt or who have no liability for Council Tax, with one payment being made for each eligible household within the Council Tax dwelling. 

8. Where a claim to CTR has been backdated and awarded for at least 1 day during the above noted period, this household will be eligible to receive the payment.

9. Where an eligible individual dies prior to receipt of payment, the payment should be made to the executor of the estate. Existing processes should be observed for payments made in this instance.

Delivery

10. All payments, except where backdating occurs, should be made no later than 31 October 2021. Payments, in cases where backdating occurs, should be made no later than 30 November.

11. In order to manage expectations of eligible households, councils should make information available publicly on the proposed delivery timetable and process for payments in their area.

12. Where entitlement is based on receipt of CTR, the payment should be made to the CTR applicant, or by credit to the account as indicated below. For groups who are exempt or who have no liability for Council Tax, local authorities should use discretion to identify the payee in these households.

13. Local authorities have discretion over the method used to make payments to households. Direct payment via BACS is encouraged with flexibility for alternate payment mechanisms to be used, such as PayPoint or equivalent or cheque. Local authorities should give consideration to the method of payment, given local capacity, and take reasonable steps to ensure recipients are not disadvantaged by the mechanism selected.

14. In line with our shared principles of dignity and respect, our preference is a ‘cash-first’ approach. However, in conjunction with the offer of a direct payment to households, local authorities may also offer a credit to a household’s Council Tax / Water and Wastewater account to reduce their liabilities. It is at the discretion of the householder how they choose for the payment to be made. Where a credit is applied to a household’s Council Tax account, this should be applied after the Council Tax Reduction is calculated to ensure that the household receive the benefit of the full £130 LIPP.

15. A light touch application may be required to request payment details from households. Local authorities should take reasonable steps to verify these payment details. Local authorities must ensure their actions are compliant with GDPR requirements.

16. Local authorities, where contacting individuals should make clear the timescale for response, the information required and what will happen if no response is received. In doing so there may be instances where, despite reasonable steps being taken to make payments to eligible households within the delivery period, local authorities will be unable to make payment. In these instances the following action should be taken:

a. If councils are unable to make payments to individuals by 31 October, or 30 November where backdating applies, or if no response is received within the deadline set, a credit should be made to Council Tax accounts for eligible households and a notification issued to this effect.

b. In the case where no liability for Council Tax exists, no payment will be made and councils should confirm to the Scottish Government how many households were eligible but did not receive a payment.

17. Local authorities will bear no liability to make payment to households out with the period of delivery outlined above.

Reporting

18. Local authorities are required to provide high level reporting, using the template provided in this guidance, to the Scottish Government Tackling Child Poverty Unit via email to sjsu@gov.scot. The template includes:

1. the number of payments made in their area by those who are:

i in receipt of CTR;

ii exempt from Council Tax (as per above criteria).

b. The number of households who were eligible but for which it was not possible to make a payment, including for those who are:

i in receipt of CTR;

ii exempt from Council Tax (as per above criteria)

19. Returns should be provided no later than 17 December 2021. This will enable funding to be provided to local councils through redetermination of the General Revenue Grant and Parliamentary scrutiny of this measure.

Treatment for tax and benefit purposes

19. DWP have considered the purpose of the payment against the definition of ‘local welfare provision’ in relevant legislation.[1] On that basis, DWP have indicated that payments would be disregarded for the purpose of those benefit entitlements for which the legislation specifies that capital to be disregarded includes ‘any local welfare provision.’[2] DWP have also indicated that the payments would have no impact on particular contribution-based benefits.[3]

20. DWP have indicated that payments will be treated as capital for the purpose of Universal Credit and may impact upon entitlement where the total capital held exceeds £6,000, either prior to or as a result of this payment. Further information on the treatment of capital for the purpose of Universal Credit can be found on the understanding Universal Credit website.

21. HMRC have indicated that payments would be disregarded as income for tax and benefit purposes.

22. Within the Council Tax Reduction system a crisis payment made by a local authority for the purpose of meeting a short term need is disregarded as income and capital of a person, where the payment is made using the local authority’s power to advance well-being[4] and is using funding provided by the Scottish Ministers[5].  While it is for local authorities, as administering bodies, to reach their own view on this point, the Scottish Government is funding the payments as a response to the crisis that the global pandemic is causing.

Communications and key messaging

23. To support local communications the following key messages are suggested as a template for adaptation:

• As announced by the Scottish Government on 8 March, households in receipt of Council Tax Reduction will receive a £130 payment to help towards increased costs and lost income during the pandemic.
• The payment will also be offered to households who:
  • have no liability for Council Tax as they are in temporary accommodation, including a refuge.
  • are exempt from Council Tax as:
    • their home is unoccupied because they are being cared for or are caring for someone else;
    • all members of the household are care leavers, are under 18 or are severely mentally impaired;
• Eligibility is based on receipt of Council Tax Reduction, or meeting criteria for additional groups, in April 2021. If a backdated claim for Council Tax Reduction is awarded for this period, then households will also be entitled to the payment.
• Payments will be made by the end of October 2021 for eligible households.
• The date when payments will commence is still to be confirmed.
• Only one payment will be made to each household.
• We will be in contact to agree how the payment will be made. This can be paid into your bank account, via an alternate mechanism such as PayPoint, or as a credit to your Council Tax account.
• We will not employ third parties to gather information on our behalf.  If you have reason to believe that the person contacting you does not work for the council please contact us immediately. You should never give out your bank details to someone you do not trust.
• Households can use this money as they see fit and there is no expectation that the £130 payment be used for any specific purpose.
• If you receive Universal Credit, then this payment will be counted as capital. This will not normally affect the amount you receive unless you have savings or other capital totalling over £6,000. If you are concerned that this payment could impact your Universal Credit award, you should report the payment in your journal by signing in to your Universal Credit account or by calling the Universal Credit helpline on 0800 328 5644.
• This payment will be disregarded in full for other benefits and for income tax purposes.
• This payment is in addition to support delivered through the Family Pandemic Payment.
• If you are not already receiving Council Tax Reduction and believe you may be eligible you can find out more at the Citizen’s Advice Scotland website.
• The free Money Talk Team service is available to help ensure you receive all the support you are entitled to. Delivered by Citizen’s Advice Scotland, this can be accessed by calling 0800 085 7145, or you can find out more on their website.

24. Individuals can also be directed to the public information available at https://www.mygov.scot/low-income-pandemic-payment.