SMITH CHALLENGES PM ON COUNCIL TAX BENEFIT RULES

12.00.00am BST (GMT +0100) Wed 10th Jun 2009

Local MP Sir Robert Smith has today urged Gordon Brown to look again at unfair council tax benefit rules which are still based on calculations made in 1992.

According to legislation passed 17 years ago, householders cannot claim for council tax benefit if they have more than £16,000 in savings. Yet research shows that if this limit had kept pace with inflation, it should now be £27,000. With savers losing out due to historically low interest rates, the MP for West Aberdeenshire and Kincardine called on the Prime Minister to increase the limit to especially in such difficult economic times.

Speaking during Prime Minister's Questions, Sir Robert said:

"Pensioners and others who rely on their savings are suffering greatly from the low interest rates needed to tackle the recession.

"Will the Prime Minister explain to them why the savings limit for council tax benefit has struck at £16,000 when if it had gone up in line the Retail Price Index it would now be £27,000?"

Sir Robert later added:

"Savers have been the innocent victims of the recession.

"The Council Tax is an unfair tax that needs to be replaced. Until it is we need a benefits system that does not penalise hard-pressed pensioners who have saved for their old age."