IFS Urges UK Government to Merge Council Tax Support into Universal Credit

The Institute for Fiscal Studies is urging the Government of the United Kingdom to integrate Council Tax Support into Universal Credit to simplify the benefits system. The organization argues that because local councils administer Council Tax Support separately from the Department for Work and Pensions, millions of low-income claimants remain unaware of their eligibility for aid that provides over £500 annually on average to the poorest tenth of households.

This fragmented administration has created a regional postcode lottery. Since 2013, councils in England have reduced total support by approximately £630 million, while Scotland and Wales have maintained higher support levels. The IFS warns that the current structure may discourage employment, as the dual-withdrawal of both benefits as earnings rise can leave claimants with only 36p for every additional pound earned.

Although the government has not announced plans for a merger, the IFS maintains that integration would eliminate administrative duplication and reduce confusion for claimants. The proposal aims to replace the current system of separate applications with a single, integrated process to ensure consistent support and higher work incentives.