The city council has launched a consultation on its Council Tax Reduction Scheme (CTRS).
CTRS works on the basis that the lower a household's income, the greater the assistance they are entitled to with paying their council tax.
The council is proposing changes to the scheme in anticipation of rising costs caused by Central Government's intention to cut Working Tax Credits.
The cuts to tax credits could mean the average family would lose £20 per week and affected households would therefore be entitled to more help from the CTRS.
This would cost City of Wolverhampton Council, which runs the CTRS, an additional £250,000 and the extra cost will not be funded by Central Government.
The council cannot afford these increased costs at a time when Government funding cuts mean it is already engaged in a £134 million savings programme.
To reduce the predicted increased costs of the CTRS, the council is proposing to change how it calculates the amount of support households receive.
The recommended option is to remove from the calculation what is called the 'additional earnings disregard' - this is £17.10 of a household's weekly income which is currently ignored.
The council is recommending this option as it amends the existing CRTS for only approximately 1,000 households who are affected by the Government's decision to reduce Working Tax Credit. However, it still leaves them with a slightly higher award than for 2015 to 2016 and less Council Tax to pay whilst limiting the increase in the overall cost of the Council Tax Reduction Scheme.
Councillor Andrew Johnson, City of Wolverhampton Council's cabinet member for resources, said: "We weren't planning any changes to the Council Tax Reduction Scheme for next year, but these Central Government cuts to Working Tax Credits mean we must act.
"We can't afford the additional £250,000 that it will cost at a time when the Government is already slashing our funding and more cuts are expected to be announced in the spending review later in the year.
"We are extremely keen to hear what people think about the proposed changes and I would urge them to participate in the consultation."
The consultation runs until 15 November and can be completed online via Type=articles;Articleid=7313;Title=Council Tax Reduction Scheme;.
- released: Thursday 15 October, 2015