Wandsworth Council is set to reform its Council Tax Reduction (CTR) scheme, proposing significant changes to support working-age households facing financial challenges.
The Finance Overview and Scrutiny Committee met on Thursday, October 8, 2026, to discuss proposals aimed at making the CTR scheme more financially sustainable. The current scheme, which offers up to 100% support to vulnerable working-age households, is projected to cost £14 million annually by 2030/31 if left unreformed. The proposed Option 3 aims to reduce the cost of the working-age scheme to £7.1 million by 2030/31, representing a significant reduction from the unreformed projection. While the scheme would initially be more expensive in the first few years due to a gentler transition, it is projected to return to the current financial envelope by 2030/31.
Councillor Graham, Deputy Leader of the Council and Cabinet Member for Finance, explained that the proposed changes aim to ensure all working-age households contribute something towards their Council Tax, while also extending support to some low-income working households currently excluded from the scheme. The proposed Option 3 involves removing the WA1 category, which provides 100% CTR for vulnerable households, including those with disability-related benefits or a child under three. These households would be reassessed under other categories, potentially resulting in a reduced level of support.
Households previously in the WA1 category would be reassessed under the following categories:
- WA2 (Out of Work with Children): 91% support in 2027/28, reducing to 52% by 2030/31.
- WA3 (Out of Work without Children): 82% support in 2027/28, reducing to 48% by 2030/31.
- WA4A (Employed with 1 or 2 dependents): 83% support in 2027/28, reducing to 35% by 2030/31.
- WA4B (Employed with 3+ dependents): 84% support in 2027/28, reducing to 40% by 2030/31.
- WA5A (Employed – Single person): 80% support in 2027/28, reducing to 25% by 2030/31.
- WA5B (Employed – Couple): 80% support in 2027/28, reducing to 25% by 2030/31.
The removal of the WA1 category would mean that households previously in this category would become liable for a proportion of their Council Tax bill. For households in Band D properties, the average increase in Council Tax liability in 2027/28 is estimated as follows:
- WA1 households moving to WA2: An average increase of £102.04.
- WA1 households moving to WA3: An average increase of £255.09.
- WA1 households moving to WA4A: An average increase of £204.07.
- WA1 households moving to WA4B: An average increase of £204.07.
- WA1 households moving to WA5A: An average increase of £255.09.
- WA1 households moving to WA5B: An average increase of £255.09.
These figures represent the excess over their existing caseload, which was £0 under the WA1 category.
However, the changes would be phased in over four years to allow households to adjust, and new income bands would be introduced to extend some support to low-income working households. The proposed new income bands for the Council Tax Reduction Scheme are:
- WA4AA: Working with 1 or 2 dependents, with net earnings between £250 and £350.
- WA4AB: Working with 3 or more dependents, with net earnings between £275 and £350.
- WA5AA: Working – Single person, with net earnings between £125 and £200.
- WA5AB: Working – Couple, with net earnings between £160 and £250.
These bands are proposed to extend support to low-income working households who currently fall just outside the scheme's eligibility thresholds.
Councillor Henderson raised concerns about the combined effect of Council Tax increases and changes to the CTR scheme on low-income households, particularly disabled residents, carers, and families with children under three. Wandsworth Council is considering a significant increase in Council Tax. The planning assumption is that Wandsworth's share of the Band D Council Tax will rise from £510 to £1,468 in 2027/28. Including the Greater London Authority precept, the indicative total Band D bill would be approximately £1,978, representing a 94% increase on the current year's charge. This increase is planned to be implemented in 2027/28.
Mrs. Mary, Executive Director of Finance, confirmed that while the financial impact for each household band has been modelled, the specific differentials for those currently in the WA1 band are difficult to predict precisely. The council plans to contact all households with an email address to gather more detailed information on individual impacts. The meeting minutes also state, We will always say this, the best route to financial safety is engaging with us. If people engage with us, we will help them with their arrears and their tenancy sustainability either in the private or in the social rented sector. And we will work with people on their accounts. And, you know, we go to the extent of helping people to budget. We get people linked into benefits that they're not currently claiming that they might be entitled to.
The committee acknowledged that the proposed changes to the CTR scheme would be difficult for many residents and that the council was in a difficult situation. It was suggested that the scheme be brought back to the December meeting for further discussion. The original agenda for the meeting can be found here, and the public reports pack is available here.