Council Tax Rebate 2022 for energy costs or all living costs?

OtherInbox

Hello all,

 

I wanted to ask your opinion on the council tax rebate 2022. The government is describing this as aimed at easing the rising costs of living, but its website also states that the rebate is aimed at addressing the rising "energy costs". Which one is it then?

 

The reason I ask is that I have a lodger to whom I let a room. They pay a fixed monthly rent which includes all of the bills, including the council tax, water & sewage, service charges for the building, broadband and energy bills.

 

However, with regard to the energy costs, the rent includes a fixed monthly amount of £50.  This means that if a monthly bill exceeds £50, then the lodger is expected to share that excess amount with me (or if I am out more than 3 weeks in that month, which happens sometimes, then they need to pay the entire excess amount, i.e. whatever is above that £50 allowance, as this relates mostly to their consumption).

This is to ensure that in those weeks when I am away, the lodger does not leave the heating on for all day when out, etc. and that the energy is not spent in a wasteful manner where not needed. 

I suspect that I am eligible for the £150 council tax rebate that will be paid in April, but I really do not know how to deal with it in relation to my lodger.

 

During the winter months the lodger had to contribute between £6.50 and £19 per month towards the energy bills simply because the bills in winter months came to more than £50, so that excess had to be shared between us (with me paying the first £50).

 

However, in the summer months, the lodger is likely to be shielded from any increase as I will be paying in entirety any bill that comes up to £50.

 

So, for instance, last August the bill came to a total of £35. If this coming August it comes to a total, say, £48, then my lodger will see no difference and have no extra costs, because I cover the first £50 of any bill -- whereas I would end up paying £13 more for the month of August compared to last year, which would represent a considerable increase for me.

 

The same applies to all other bills that are included in the rent -- the rent for the room remains the same but I will be paying considerably more because all rates have gone up – and in some cases quite significantly so. For instance, my broadband bill has increased by a staggering 24% since the lodger moved in, council tax by 9,14% and water & sewage by 9%.

 

I would like to be fair with my lodger and so I am therefore trying to understand what I am required to do with the rebate when I get it -- if it is to cover only the energy costs increase, then I think I should be sharing part of it with my lodger. the question would be then to work out in what proportions, given the arrangement we have with regard to the energy costs.

If however the rebate is meant to help with the rise in living costs in general, then I suppose that the apportionment would be very different, because most of the increase in household bills is being absorbed by me.

 

Any respectful thoughts and comments would be appreciated!

QrizB

Welcome to the forum.

OtherInbox said:

I wanted to ask your opinion on the council tax rebate 2022. The government is describing this as aimed at easing the rising costs of living, but its website also states that the rebate is aimed at addressing the rising "energy costs". Which one is it then?

It's a bit like the £350M on the side of a bus; it's going to be given to the NHS, and used to make up for the lost EU structural funding, and used for levelling-up, and used to fund a VAT cut on domestic energy.

Basically, the £150 is for whatever-the-government-thinks-it-can-get-away-with-saying-it's-for. It's £150.

OtherInbox said:

Any respectful thoughts and comments would be appreciated!

You seem to have a very complicated model you use to justfy the price you charge your lodger, while the rebate won't even come close to covering the increase in your energy bill (average bills are going up by roughly 4x the rebate). Can't you just tell them "prices are going up so I'll need to increase your rent by £5 a week" and leave it at that?

OtherInbox

@QrizB

<<You seem to have a very complicated model you use to justfy the price you charge your lodger, while the rebate won't even come close to covering the increase in your energy bill (average bills are going up by roughly 4x the rebate). Can't you just tell them "prices are going up so I'll need to increase your rent by £5 a week" and leave it at that?>>

Thanks for your reply. 

Neither I nor my lodger find this model complicated at all, and it's definitely not meant to justify anything. It's meant to prevent wasteful use of energy when I am away, that's all. All it requires is check the monthly energy bill and if it is over £50, divide the excess between us. Simple as that.

I do not intend to increase their rent, but I still would like to better understand what is to happen in the circumstances such as mine. I suspect there will be many people out there who don't pay the council tax but may pay the energy bills, so this question is likely to come up in other households, too.

Xbigman

Having a fixed monthly amount of £50 for bills is going to prove inadequate going forward and might cause some grief. I'd be inclined to scrap the allowance idea, reduce the rent by £50 and just split the bills down the middle. If you are not there a percentage of the time then pocket the £150 as compensation for your not running up the bills as much as the lodger.

Just my 2 pence worth.


Darren

[Deleted User]

Hi,

do you pay the full council tax, or do you claim for the 25% single occupancy discount, and having a lodger is a 'bonus'?

OtherInbox

frugalmacdugal said:

Hi,

do you pay the full council tax, or do you claim for the 25% single occupancy discount, and having a lodger is a 'bonus'?

Claiming a single occupier discount in my circumstances would amount to fraud because I am not a single occupier and so the answer to that question is an emphatic "No discount claimed".  Not sure though how this is relevant it is to my main question above...

LindsayT

The £150 'Council Tax rebate' is meant to help with rising energy costs.

OtherInbox

Xbigman said:

Having a fixed monthly amount of £50 for bills is going to prove inadequate going forward and might cause some grief. I'd be inclined to scrap the allowance idea, reduce the rent by £50 and just split the bills down the middle. If you are not there a percentage of the time then pocket the £150 as compensation for your not running up the bills as much as the lodger.

Just my 2 pence worth.


Darren

Thanks Darren.  The £50 allowance was not meant to cover the utility bills -- the bills are covered in the rent, so that is not an issue (the allowance cap was/is meant to prevent wasteful energy use when I'm away).  My question is more on whether the council tax rebate is meant to ease the rising living costs in general or specifically the rising energy costs.  I think I made my question too long-winded and unnecessarily confused the “forumites” here... Thanks anyway!

Sea_Shell

OtherInbox said:

Xbigman said:

Having a fixed monthly amount of £50 for bills is going to prove inadequate going forward and might cause some grief. I'd be inclined to scrap the allowance idea, reduce the rent by £50 and just split the bills down the middle. If you are not there a percentage of the time then pocket the £150 as compensation for your not running up the bills as much as the lodger.

Just my 2 pence worth.


Darren

Thanks Darren.  The £50 allowance was not meant to cover the utility bills -- the bills are covered in the rent, so that is not an issue (the allowance cap was/is meant to prevent wasteful energy use when I'm away).  My question is more on whether the council tax rebate is meant to ease the rising living costs in general or specifically the rising energy costs.  I think I made my question too long-winded and unnecessarily confused the “forumites” here... Thanks anyway!

With the new energy rates coming in, have you done the sums to know if you are likely to have ANY months that come in under £50!?  I think you'll find you're having to split every month.

In answer to your question, think of it this way...we are only getting the £150 BECAUSE of rising energy bills, not the wider cost of living.

So make of that what you will.

There is nothing to say that one then MUST use that money towards energy.

JGB1955

I think that, if I was your lodger, I might feel a bit aggrieved if the £12.50 per month wasn't being credited against the rising energy costs.  It's not a council tax rebate - it's an allowance of £150 (that so happens to be) administered by your local council on behalf of the government.  

Sea_Shell

JGB1955 said:

I think that, if I was your lodger, I might feel a bit aggrieved if the £12.50 per month wasn't being credited against the rising energy costs.  It's not a council tax rebate - it's an allowance of £150 (that so happens to be) administered by your local council on behalf of the government.  

Maybe the OPs "cap" should rise to £56.25.