Amendments to council tax reduction scheme in Scotland to take account of increase in maximum amounts of childcare costs element of universal credit

New statutory instrument reflects universal credit changes coming into force from 28 June 2023

New regulations have been issued in relation to the council tax reduction (CTR) scheme in Scotland.

In force from 28 June 2023, the Council Tax Reduction (Scotland) Amendment (No. 2) Regulations 2023 (SSI.No.197/2023) amend the Council Tax Reduction (Scotland) Regulations 2021 (SSI.No.249/2021) to increase the maximum deduction that can be made in respect of childcare costs for recipients of universal credit in the council tax reduction scheme.- to reflect the change to universal credit from 28 June 2023 that increases the universal credit childcare costs maximum amounts to £950.92 for one child and £1630.15 for two or more children per assessment period.

The policy note accompanying the regulations advises that –

'… but for these regulations, from 28 June it will be possible for the childcare costs element of the universal credit maximum amount to exceed the childcare cost cap which can be deducted from income when calculating CTR entitlement [£175 a week where there is one child in respect of whom relevant childcare charges are paid, and £300 where there are two or more children]. This could result in households seeing a higher proportion of their universal credit award being treated as income, whilst having their childcare costs capped at the current maximum amounts.

This instrument amends regulation 42 – Calculation of income on a weekly basis (applicants with an award of universal credit) to increase the maximum amounts that can be deducted from earnings to £258 where the applicant's family includes only one child in respect of whom relevant childcare charges are paid, and £442 where the applicant's family includes more than one child in respect of whom relevant child care charges are paid. This will ensure that the maximum deduction that can be made from income will not be less than the amount included in the universal credit maximum amount in respect of childcare charges. So nobody should be treated as having an increase in income as a result of the change.'

SSI.No.197/2023 is available from legislation.gov.uk