New benefits cuts bring little incentive to keep working, Crawley Borough Council has warned.
This is because low-income workers will have to pay a larger share of council tax as part of the changes whereas jobseekers allowance recipients will continue to be exempt.
The council has urged the government to delay implementing changes to council tax benefits to allow it to develop a local scheme which will include more work incentives.
A council spokesman said: “The Government needs to recognise that its proposals, with full protection for pensioners (and possibly ‘other vulnerable groups’), combine with a 10 per cent cut in finding will make it almost impossible to devise schemes that support work incentives.”
The Government previously paid council tax benefit directly to claimants but under the proposals the council will allocate the benefit itself.
But the money available will be substantially less then what was previously paid meaning low-income workers will have to pay more.
Some 5,842 Crawley residents who receive help with their council tax would have to pay on average £100 per year extra towards their council tax, according to council estimates.
Cllr Peter Lamb (Northgate), leader of the Crawley Labour Group, said: “Obviously I’m very concerned about the impact these changes will have on low-income residents, many of whom are already in work. I’m also concerned that when many of these families are unable to pay the tax the council will have to cut local services to make up the difference. This is a bad deal for everybody.
“In the end, when you consider how many families are likely to default over this and the housing benefit changes, with all the costs of evicting them, the only people who stand to make any money are the lawyers.”
Pensioners and claimants who are disabled or have children under five will receive protection under the scheme.
But the remainder working age claimants will have to contribute more according to their personal circumstances such as savings.
The council expects to lose £25,000 in non-payments.
The shortfall in the amount the government will pay the council to implement the scheme and the amount the council estimates it will need is £50,000.