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Fears Sandwell council tax support could be reduced

Thousands of poor people in Sandwell could be asked to pay up to £120 a year under plans to cut their council tax support.

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The 7,000 low-earning and unemployed residents in the borough do not currently pay council tax - but face being made to pay 10 per cent of the bill.

Sandwell Council is considering the measure after the High Court ruled it could not withhold support from people who had lived in the borough for less than two years.

See also: Council tax support for thousands of families could be cut due to funding shortfall.

Previously the council had imposed a residency test on anyone claiming council tax relief to avoid 'benefits tourism' as other boroughs made poorer people contribute something.

Leader Darren Cooper said the ruling will leave the council with a £1.6million shortfall and the authority now faced withdrawing the tax exemptions from next year or making cuts to the budget.

A consultation will be launched with residents to find out which option they prefer.

See also: £200k to improve family services in West Midlands.

Councillor Cooper said: "We decided only to offer a reduction in council tax to people who had continuously lived in Sandwell for two years - our only intention was to protect our own residents from footing the bill for people who have recently moved into Sandwell.

"We have decided not to appeal the decision of the High Court. So we now have two options.

"Find the £1.6million shortfall - money that has got to come from somewhere, so that's going to mean a cut to other services - or come up with a new arrangement where everyone, including the most vulnerable and poor people in the borough, pays something towards their council tax bill."

See also: Dudley's poor being 'dumped' on Sandwell taxpayers, say council tsars.

He added: "The second option is going to mean around 7,000 residents who are currently exempt from paying council tax will have another bill to pay.

"It would mean everybody, regardless of their circumstances and income, would have to pay at least 10 per cent of their council tax bill – a minimum of between £90 and £120 a year.

"This is no easy decision to make either way."

See also: Council tax rise 'would see residents pay for authority's mistake'.

The two-year residency requirement on anyone wanting reductions to their council tax bills was brought in by the council two years ago after the Government cut tax benefits.

But the move was ruled illegal by a High Court judge, who said it was discriminatory to people who had recently moved into the borough. The council has since decided not to appeal.

The council is already under financial strain and has to make £121million of cuts over the next two years.

Last month it unveiled plans to close, downscale or move five libraries to save £700,000.

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