CROYDON IN CRISIS: Errors in applying Council Tax exemptions for the elderly and disabled, as well as carers and students, has led to a Judicial Review to be heard tomorrow
Judgement day: Croydon’s management of its Council Tax scheme has led to the legal challenge in the High Court
A judge in the High Court will hear a case tomorrow that claims that changes to Croydon’s Council Tax Reduction Scheme made last year were not legal or fair, and discriminated against the old, disabled and other protected groups. The case could have implications for local authorities across the country.
The Judicial Review has been brought by Croydon resident Dr Yusuf Ali Osman, who is blind and unable to work full-time. Dr Osman has been a member of the council’s health scrutiny committee and on the adult social services users’ panel.
Dr Osman’s case claims that the changes left pensioners, disabled people, carers, students and foster parents to pay Croydon’s Council Tax bills when, in the years before 2022, they would have been exempt.
The case brought on behalf of Dr Osman claims the changes were a result of the council applying the Minimum Income Floor – or MIF – to people who are protected from the MIF under Universal Credit regulations.
Under Universal Credit, the MIF applies only to people required to be in, or looking for, full-time work. But Croydon’s MIF omitted that component and included categories of residents who would usually be exempt under Universal Credit.
The MIF assumes self-employed people have a weekly income of £332.50 (minus tax and National Insurance). But some groups of people are exempted in Universal Credit because they are in reality unable to achieve this level of income. Applying the MIF means that their Council Tax liability is not reduced in line with their actual income.
Dr Osman claims the 2022 CTR scheme initially discriminated against him as a self-employed resident with a significant disability, and left him facing a Council Tax bill of hundreds of pounds when in the past he had been exempt.
Croydon’s CTR Scheme also ceased to disregard the disability-related income of people on means-tested benefits, meaning that they are effectively paying money meant for their disability on Council Tax.
Only after Dr Osman launched a legal challenge to the council’s new rules about the MIF and disability-related income in its 2022 scheme did Croydon Council decide to exempt him from Council Tax. It has also this month removed the MIF category that affected him, as a disabled resident, with the result that Dr Osman will not have to pay Council Tax in 2023.
The changes, which became effective on March 1, are for the 2023 scheme and free disabled people from the discriminatory provisions, but the scheme still affects other people who are not expected to be in full-time work.
Cashing out: Croydon changed its scheme after it learned of the legal challenge
Croydon Council says the legal claim is now academic because it has changed its CTR Scheme, but Dr Osman is persevering because he argues that although the latest rule change benefits him, other vulnerable Croydon residents are still left having to pay Council Tax when they should properly be exempt.
They include people who care for people with disabilities or under-threes, pensioners with a working-age partner, recent adopters, many students and many foster parents.
The recently revised Croydon CTR scheme does contain a partial exemption for lone parents, whose minimum income floor is set at the equivalent of 20, not 35 hours, per week.
While the scheme disregards some disability-related income, it still does not disregard the disability-related component of Employment and Support Allowance.
“Croydon Council only specifically provided an exemption from the MIF for self-employed disabled residents after I launched a legal action,” Dr Osman said, “and it is still failing to acknowledge the mistakes it has made.
Strong case: Dr Yusuf Osman
“I feel strongly that Croydon should acknowledge that it has not introduced the MIF in line with the Universal Credit regulations and that it has not continued to disregard all disability-related income. Its 2022 scheme did neither of these things, and none of the documents relating to the 2023 scheme indicate that the council has acknowledged these two fundamental issues.”
Dr Osman is represented by Leigh Day solicitor Kate Egerton, who said: “Dr Osman will make the core argument that Croydon Council misdirected itself in 2022 by believing its MIF would be ‘applied in line with Universal Credit’, while in reality its MIF is not aligned with UC and, resultingly, has discriminatory and irrational effects.
“The 2023 changes still do not replicate the UC exemptions and the council continues to fail to acknowledge this.
“While the changes mean that disabled self-employed people now escape the MIF, they do not assist others who under UC would be exempted.
“We understand that there are other local authorities who may also have failed to exempt people with limited capability for work from the MIF. We hope that a positive result in this case will have an impact both in Croydon and nationally.”
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