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Council tax reforms could trigger 'mental illness' for poorest, says Christian charity

Millions of people on benefits in England will have to start paying a proportion of council tax from April, which could see their bills shoot up by £600 annually.

It's because most local authorities in England are passing on funding cuts to householders after a decision by the Government to scrap the council tax benefit system.

It follows the coalition's decision to hand over council tax responsibilities to local authorities across the country.

Resolution Foundation, the independent research and policy organisation that supports low to middle income households suggests, as a result of council tax benefit reform, three-quarters of local authorities are set to demand increased payments from the 3.2 million of the poorest working-age households who currently pay either no council tax or a reduced charge.

RF's  'No Clear Benefit 'report also claims families are facing a hike of more than 330% in the most severe cases.

It comes as the government hands responsibility for council tax support to England's 326 local authorities, along with a 10% cut in funding for it.

Revd Paul Nicholson from the Zacchaeus 2000 Trust an organisation helping people in poverty has told Premier's News Hour why he's outraged by the plans:

However, the Government has insisted that pensioners are fully protected from any rise under the new localised system, known as council tax support, meaning that working-age households will bear the full brunt of the changes.

In a statement to Premier, Local Government Minister Brandon Lewis said: "Spending on council tax benefit doubled under the last Administration and welfare reform is vital to tackle the budget deficit we have inherited.

"Under the last Administration, more taxpayers' money was being spent on benefits than on defence, education and health combined.

"Our reforms will localise council tax support and give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work. We are ending the something for nothing culture and making work pay.

"Under the last Government, council tax bills doubled.

"The Coalition Government has worked with councils to freeze council tax for two years, with a further freeze offered for this year.

"We are cutting council tax in real terms for hard-working families and pensioners, and we are on the side of people who work hard and want to get on."

Shadow communities secretary Hilary Benn said it's unbelievable: "This is a tax rise imposed by David Cameron and Eric Pickles on carers, the disabled, single mums, people who go out to work...what do they all have in common? They're on very low incomes."

Meanwhile there's more bad news for the private rental sector with new figures suggesting rent in England  is rising by an average of £300 a year, with a claim it's leaving many in a 'rent trap' with little or nothing left to save for a home of their own.

The charity Shelter's blaming it on a chronic lack of housing. Its report shows many have little hope of saving for a deposit.

Alastair Murray from Christian charity Housing Justice tells Premier would-be first time buyers are flooding the rental market:

Meanwhile, a lack of first-time house buyers in the UK is a "cause for concern", the Nationwide Building Society has said.

Its comments came as it said house prices in January were unchanged from a year earlier, although they had risen by 0.5% compared with the month before.

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