Is FHDC’s Council Tax Policy Unfair to Disabled Universal Credit Claimants?

An FHDC case exposes a fixable flaw in working-age Council Tax Reduction—and a lawful route the Council could use today.

The Story In A Nutshell

A disabled resident who moved from ESA Support Group to Universal Credit (UC) under managed migration saw their Council Tax Reduction (CTR) cut because the Council counted UC’s transitional element as ordinary income. That element exists precisely to stop people being worse off at the point of transfer—and then erodes over time. Count it as income now and you get a double detriment: a CTR loss immediately, and another as the element withers.

When the resident wrote to Folkestone & Hythe District Council (FHDC) offering practical, lawful fixes, the Council replied that the CTR scheme can’t be changed mid-year and directed them to a hardship form. Their MP agreed the outcome is “an injustice… potentially discriminatory against those with disabilities” and asked the Council to clarify whether it can disregard the transitional element.

This is not a one-off. It’s a policy seam that could affect a predictable working-age disabled cohort—exactly the people UC’s protection was meant to shield.

What The Resident Asked For

• CTR income disregard for the UC transitional element (or a CTR “mirror” addition that offsets the loss and tapers as the element erodes).

• Interim relief using s.13A(1)(c) Local Government Finance Act 1992—either class-based for the affected cohort, or individually—so nobody is penalised while a longer-term fix is considered.

• A CTR-specific Equality Impact Assessment (EIA) modelling the effect on disabled claimants and recording the reasons for whichever mitigation is chosen.

The Council’s Response – And What’s Wrong With It

FHDC said it can’t amend the working-age CTR scheme mid-year (true), and promised to feed ideas into the 2026/27 review (fine). But it didn’t engage with the separate, in-year discretion under s.13A(1)(c), which lets councils reduce council tax “in any case or in any class of case.” In plain English: a council can cut the bill for an individual case (say, a care leaver) or for a defined class (for example, armed forces veterans or households in temporary accommodation). This power sits outside the CTR scheme and can be used today.

Instead, the Council signposted a hardship scheme assessed case-by-case on affordability. Helpful, but not the same thing. A hardship pot is after-the-fact triage; s.13A(1)(c) can be a targeted policy fix for a defined class (e.g., ESA→UC claimants with a transitional element), stopping the harm at source. Treating hardship as a substitute for s.13A risks fettering discretion.

The Council also didn’t answer the resident’s core consistency point: its scheme explicitly accommodates UC transitional provisions for pension-age claimants, yet working-age claimants see the UC award imported wholesale as income. If there’s a sound rationale, the Council should publish it.

Finally, there’s the Public Sector Equality Duty. The impact here is predictable for a disabled, working-age cohort. The duty is continuing, and it requires the Council to have due regard to that impact and to consider reasonable mitigations—not merely point people at hardship forms.

The MP’s Intervention

The local MP Tony Vaughan KC, described the situation as “an injustice… not in the spirit of the protection” and “potentially discriminatory against those with disabilities.” They noted that Scotland has already moved to safeguard transitional amounts within CTR and indicated they would ask FHDC to consider disregarding the UC transitional element.

Crucially, the MP queried whether s.13A(1)(c) is relevant. It is—very. It’s the lawful bridge between recognising a flaw and changing the scheme next year: a class decision now, a scheme amendment later.

Awards & Accountability

On 9 October 2025, FHDC announced it had won the Excellence in Social Inclusion category at the Institute of Revenues, Rating and Valuation (IRRV) national awards, praising “exemplary delivery” for residents facing poverty and deprivation. That public accolade sits uneasily alongside reports from disabled, working-age residents migrating to UC who face a “double hit” to CTR because a protective UC top-up is being treated as income. Awards should reflect day-to-day reality: if inclusion is to mean more than a trophy, FHDC should use the lawful, in-year tools already available to stop the harm and publish a transparent equality assessment that shows the work.

The Law & The Levers – Plainly

• You can’t rewrite a working-age CTR scheme mid-year. Councils approve next year’s scheme by Full Council before April.

• You can reduce bills today under s.13A(1)(c)—individually or for “classes of case.” It’s a broad, stand-alone discretion that can neutralise known anomalies in-year, and it can be time-limited and tightly defined.

• Hardship schemes are useful—but they are not a class determination and must not substitute for considering s.13A(1)(c) properly.

• The PSED requires concrete consideration of impacts on disabled residents and of reasonable alternatives (e.g., a disregard, mirror protection, or class relief), with documented reasons.

Simple Fixes The Council Could Adopt Now

1. Class-based s.13A(1)(c) relief (interim):
   Define the class as working-age ESA Support Group/LCWRA claimants who migrated to UC with a transitional element. For this class, disregard that element (or grant an equivalent CTR mirror addition) until the transitional amount erodes.

2. Individual s.13A relief:
   If the Council won’t adopt a class solution immediately, it can reduce the individual’s liability by the amount lost solely due to the transitional element.

3. Publish a CTR-specific EIA:
   Model the erosion effect over time and record why the Council chose a particular mitigation, ready for a formal 2026/27 scheme decision.

None of these actions require rewriting the scheme mid-year. All of them reduce risk, improve fairness, and cost far less than protracted disputes.

What Happens Next

This now sits squarely with Folkestone & Hythe District Council. Three decisions will reveal whether the authority intends to fix a known flaw or simply manage its fallout:

1. Will FHDC use s.13A(1)(c) now?
   The Council can adopt a class determination today for ESA→UC claimants with a UC transitional element—or, failing that, grant individual relief that neutralises the loss caused solely by that element. This is the difference between policy action and signposting to hardship.

2. Will FHDC publish a CTR-specific Equality Impact Assessment?
   A credible EIA will model the erosion effect, quantify the hit to disabled working-age residents, and record the Council’s consideration of three remedies: an income disregard, a CTR mirror addition, and s.13A class relief—with clear reasons for the chosen option.

3. Will FHDC explain the inconsistency?
   The scheme recognises UC transitional protections for pension-age claimants but counts the same protection as income for working-age. Either there is a reasoned policy basis—or there is a design defect. Residents deserve a published explanation.

The MP has intervened and asked FHDC to engage with these points. The resident has filed a formal s.13A(1)(c) application and requested an EIA. In the meantime, the Council can pause recovery and stop avoidable harm while decisions are made.

This is not a question of administrative convenience. It is a test of fairness, legality, and leadership—and it is happening now, not next April.

Closing

Council tax is compulsory; fairness in how it is assessed should be too. When a protection designed to prevent loss is used as income to justify one, something has gone wrong in the machinery of local policy.

FHDC does not need to wait for 2026/27 to do the right thing. The law already gives it the lever: s.13A(1)(c)—for a class or a case, quickly, lawfully, and at targeted cost. Pair that with a transparent CTR-specific EIA and a reasoned explanation for the pension-age/working-age split, and the Council can turn a quiet injustice into a plain example of good administration.

If the Council acts, disabled residents will be protected from a double hit that was never meant to happen. If it does not, it will be choosing to leave a known inequity in place. The public can tell the difference.

The Shepway Vox Team

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