(ii) under provision made by regulations under
paragraph 10 of that Schedule (administration of
payments by billing authorities to major precepting
authorities) by virtue of sub-paragraph (2)(e) of that
5paragraph (reconciliation payments),

(iii) under provision made by regulations under
paragraph 11 of that Schedule (regulations about
payments by billing authorities to major precepting
authorities out of deductions from the central share),

(iv) 10under provision made by regulations under
paragraph 33 of that Schedule (transitional protection
payments),

(v) under provision made by regulations under
paragraph 39 or 40 of that Schedule (designation of
15areas or classes of hereditament) by virtue of
paragraph 41 of that Schedule (payments by billing
authorities to relevant authorities), or

(vi) under provision made by regulations under
paragraph 42 of that Schedule (payments by Secretary
20of State following estimates of amounts relating to
designated areas or classes), and”.

(4) In subsection (2)(b), after “major precepting authority” insert “or the
Secretary of State”.

(5) In subsection (2), for paragraph (c) substitute—

“(c) 25payments to be made by the authority under any of the
following provisions of Schedule 7B that are of a kind
specified by the Secretary of State as falling to be met from a
billing authority’s collection fund—

(i) paragraph 14(1) (payments to Secretary of State
30following local government finance report);

(ii) paragraph 14(6) or (7) (payments to Secretary of State
following revised calculation);

(iii) paragraph 17(4) or (5) (payments to Secretary of State
following amending report),

(ca) 35payments made by the authority—

(i) under paragraph 6, or under provision made by
regulations under paragraph 7, of Schedule 7B
(payments in respect of the central share),

(ii) under provision made by regulations under
40paragraph 9 of that Schedule (payments by billing
authorities to major precepting authorities),

(iii) under provision made by regulations under
paragraph 10 of that Schedule (administration of
payments by billing authorities to major precepting
45authorities) by virtue of sub-paragraph (2)(e) of that
paragraph (reconciliation payments),

(iv) under provision made by regulations under
paragraph 11 of that Schedule (regulations about
payments by billing authorities to major precepting
50authorities out of deductions from the central share),

(v) under provision made by regulations under
paragraph 33 of that Schedule (transitional protection
payments),

(vi) under provision made by regulations under
5paragraph 39 or 40 of that Schedule (designation of
areas or classes of hereditament) by virtue of
paragraph 41 of that Schedule (payments by billing
authorities to relevant authorities), or

(vii) under provision made by regulations under
10paragraph 42 of that Schedule (payments to Secretary
of State following estimates of amounts relating to
designated areas or classes),”.

25 (1) Section 97 (principal transfers between funds) is amended as follows.

(2) After subsection (2) insert—

“(2A) 15The Secretary of State may by regulations make provision requiring
a billing authority to transfer from its collection fund to its general
fund such amounts as may be specified in or determined in
accordance with the regulations by reference to—

(a) sums received by the authority in respect of non-domestic
20rates under this Act, and

(b) sums received by the authority under Schedule 7B (local
retention of non-domestic rates) and required to be paid into
its collection fund by virtue of provision made by or under
section 90(1)(d) or (da).

(2B) 25The Secretary of State may by regulations make provision requiring
a billing authority to transfer from its general fund to its collection
fund such amounts as may be specified in or determined in
accordance with the regulations by reference to sums received by the
authority in respect of non-domestic rates under this Act.”

(3) 30Omit subsection (4A).

26 (1) Section 99 (regulations about funds) is amended as follows.

(2) In subsection (1)(b), for “97(1), (3) or (4A) above” substitute “97(1) or (3) or
regulations under section 97(2A) above”.

(3) In subsection (1)(c), after “97(2) or (4) above” insert “or regulations under
35section 97(2B) above”.

(4) In subsection (3)—

(a) in paragraph (b)(i), for “major precepting authorities” substitute
“one or more relevant authorities”,

(b) in paragraph (c), for “any major precepting authorities” substitute
40“prescribed relevant authorities”, and

(c) in each of paragraphs (d) and (f), for “major precepting authority”
substitute “relevant authority”.

(5) Omit subsections (3A) and (3B).

(6) Before subsection (4) insert—

“(3C) 45In subsection (3) “relevant authority” means—

(a) a major precepting authority, or

(b) the Secretary of State.

(3D) Regulations under subsection (3) may make separate provision in
relation to council tax and non-domestic rates, with the effect that—

(a) more than one estimate is to be made by a billing authority of
5whether there is a deficit or surplus in its collection fund for
a financial year and, if so, of the amount of the deficit or
surplus,

(b) each estimate takes into account different amounts to be paid
into or met from that fund, and

(c) 10each estimate has different consequences as to the payments
to be made, or other functions to be exercised, by the billing
authority, major precepting authorities or the Secretary of
State.”

27 In section 140(2) (separate administration of Parts 3 and 4 in England and
15Wales)—

(a) at the end of paragraph (a) insert “, and”, and

(b) omit paragraphs (c) and (e).

28 (1) Section 141 (payments to and from authorities) is amended as follows.

(2) In subsection (5)(c), after “such as” insert “paragraph 2 of Schedule 7B or”.

(3) 20In subsection (7), before “paragraph 5(10) and 14 of Schedule 8 below” insert
“regulations under section 99(3) above, regulations made under paragraph
7 of Schedule 7B below, paragraphs 14(2), (9) and (10), 17(7) and (8) and 27(1)
of that Schedule, regulations made under paragraph 28 of that Schedule,
paragraph 30(6) of that Schedule, regulations made under paragraph 33 of
25that Schedule, regulations made under paragraph 42 of that Schedule,”.

(4) In subsection (8), before “paragraph 5 of Schedule 8 below” insert
“regulations under section 99(3) above, paragraph 6 of Schedule 7B below,
regulations made under paragraph 7 of that Schedule, paragraphs 14(1), (6)
and (7), 17(4) and (5) and 24(1) of that Schedule, regulations made under
30paragraph 28 of that Schedule, regulations made under paragraph 33 of that
Schedule, regulations made under paragraph 42 of that Schedule,”.

29 In section 144(2) (definition of “billing authority” etc) at the end insert “; but,
in the case of references to a billing authority in Part 2 of Schedule 8, this is
subject to paragraph 3A of that Schedule.”

35LGFA 1992

30 In Schedule 13 to the LGFA 1992 (minor and consequential amendments)
omit paragraph 78(2).

Audit Commission Act 1998 (c. 18)Audit Commission Act 1998 (c. 18)

31 In section 28(1) of the Audit Commission Act 1998 (certification of claims,
40returns etc)—

(a) at the end of paragraph (b) insert “or”, and

(b) omit paragraph (c) and the “or” at the end of that paragraph (which
provides for certification of calculations under Schedule 8 to the
LGFA 1988).

Local Government Act 2003 (c. 26)Local Government Act 2003 (c. 26)

32 The Local Government Act 2003 is amended as follows.

33 In section 70 (local retention of rates) omit subsections (4) to (6).

34 In Schedule 7 (minor and consequential amendments) omit paragraph 22(a).

Section 9

5SCHEDULE 4 Amendments relating to council tax reduction schemes

Part 1 Schedules to be inserted into LGFA 1992

1 After Schedule 1 to the LGFA 1992 insert—

Section 13A

“Schedule 1A 10Council tax reduction schemes: England

Interpretation

1 In this Schedule—

(a) “scheme” means council tax reduction scheme under
section 13A(2), and

(b) 15in relation to a scheme, “the authority” means the billing
authority which made the scheme or is under a duty to
make it.

Matters to be included in schemes

2 (1) A scheme must state the classes of person who are to be entitled to
20a reduction under the scheme.

(2) The classes may be determined by reference to, in particular—

(a) the income of any person liable to pay council tax to the
authority in respect of a dwelling;

(b) the capital of any such person;

(c) 25the income and capital of any other person who is a
resident of the dwelling;

(d) the number of dependants of any person within paragraph
(a) or (c);

(e) whether the person has made an application for the
30reduction.

(3) A scheme must set out the reduction to which persons in each class
are to be entitled; and different reductions may be set out for
different classes.

(4) A reduction may be—

(a) 35a discount calculated as a percentage of the amount which
would be payable apart from the scheme,

(b) a discount of an amount set out in the scheme or to be
calculated in accordance with the scheme,

(c) expressed as an amount of council tax to be paid (lower
than the amount which would be payable apart from the
5scheme) which is set out in the scheme or is to be calculated
in accordance with it, or

(d) the whole amount of council tax (so that the amount
payable is nil).

(5) A scheme must state the procedure by which a person may apply
10for a reduction under the scheme.

(6) A scheme must state the procedure by which a person can make
an appeal under section 16 against any decision of the authority
which affects—

(a) the person’s entitlement to a reduction under the scheme,
15or

(b) the amount of any reduction to which the person is
entitled.

(7) A scheme must state the procedure by which a person can apply
to the authority for a reduction under section 13A(1)(c).

(8) 20The Secretary of State may by regulations prescribe other
requirements for schemes.

(9) Regulations under sub-paragraph (8) may in particular—

(a) require other matters to be included in a scheme;

(b) prescribe classes of person which must or must not be
25included in a scheme;

(c) prescribe reductions, including minimum or maximum
reductions, which must be applicable to persons in
prescribed classes;

(d) prescribe requirements which must be met by the
30procedure mentioned in sub-paragraph (5).

(10) Regulations under sub-paragraph (8) may in particular set out
provision to be included in a scheme that is equivalent to—

(a) provision made by a relevant enactment, or

(b) provision that is capable of being made under a relevant
35enactment,

with such modifications as the Secretary of State thinks fit.

(11) Subject to compliance with regulations under sub-paragraph (8), a
scheme may make provision that is equivalent to—

(a) provision made by a relevant enactment, or

(b) 40provision that is capable of being made under a relevant
enactment,

with such modifications as the authority thinks fit.

(12) For the purposes of sub-paragraphs (10) and (11), each of the
following enactments as it had effect on the day on which the
45Local Government Finance Act 2012 was passed is a “relevant
enactment”—

(a) sections 131 to 133 of the Social Security Contributions and
Benefits Act 1992 (council tax benefit);

(b) sections 134 to 137 of that Act (general provisions about
income-related benefits) so far as applying in relation to
5council tax benefit;

(c) section 1 of the Social Security Administration Act 1992
(entitlement to benefit dependent on claim) so far as
applying in relation to council tax benefit;

(d) section 6 of that Act (regulations about council tax benefit
10administration);

(e) sections 32 to 34 of the Welfare Reform Act 2007 (benefit
for persons taking up employment) so far as applying in
relation to council tax benefit.

Preparation of a scheme

3 (1) 15Before making a scheme, the authority must (in the following
order)—

(a) consult any major precepting authority which has power
to issue a precept to it,

(b) publish a draft scheme in such manner as it thinks fit, and

(c) 20consult such other persons as it considers are likely to have
an interest in the operation of the scheme.

(2) The fact that this paragraph was not in force when any step
described in sub-paragraph (1) was taken is to be disregarded in
determining whether there has been compliance with that sub-
25paragraph.

(3) Having made a scheme, the authority must publish it in such
manner as the authority thinks fit.

(4) The Secretary of State may make regulations about the procedure
for preparing a scheme.

(5) 30Regulations under sub-paragraph (4) may in particular—

(a) require the authority to produce documents of a particular
description in connection with the preparation of a
scheme;

(b) include requirements as to the form and content of
35documents produced in connection with the preparation
of a scheme;

(c) include requirements (in addition to sub-paragraphs (1)(b)
and (3)) about the manner in which such documents must
be published;

(d) 40require the authority to make copies of such documents
available for inspection by members of the public, or to
supply copies of such documents to them;

(e) include provision about the making of reasonable charges
for the supply of copies of such documents to members of
45the public.

Default scheme

4 (1) The Secretary of State must by regulations prescribe a scheme
(“the default scheme”) for the purposes of this paragraph.

(2) The first financial year to which the default scheme relates must be
5the year beginning with 1 April 2013 (or such other year as is
specified in section 9(4) of the Local Government Finance Act
2012).

(3) The default scheme must comply with the requirements of—

(a) paragraph 2(1) to (7), and

(b) 10any regulations under paragraph 2(8).

(4) The default scheme may in particular make provision that is
equivalent to—

(a) provision made by a relevant enactment, or

(b) provision that is capable of being made under a relevant
15enactment,

with such modifications as the Secretary of State thinks fit.

(5) For the purposes of sub-paragraph (4), each of the following
enactments as it had effect on the day on which the Local
Government Finance Act 2012 was passed is a “relevant
20enactment”—

(a) sections 131 to 133 of the Social Security Contributions and
Benefits Act 1992 (council tax benefit);

(b) sections 134 to 137 of that Act (general provisions about
income-related benefits) so far as applying in relation to
25council tax benefit;

(c) section 1 of the Social Security Administration Act 1992
(entitlement to benefit dependent on claim) so far as
applying in relation to council tax benefit;

(d) section 6 of that Act (regulations about council tax benefit
30administration);

(e) sections 32 to 34 of the Welfare Reform Act 2007 (benefit
for persons taking up employment) so far as applying in
relation to council tax benefit.

(6) The default scheme is to take effect, in respect of dwellings
35situated in the area of a billing authority, if the authority fails to
make a scheme on or before 31 January 2013 (or such other date as
is specified in section 9(4) of the Local Government Finance Act
2012).

(7) If the default scheme takes effect in the area of a billing authority,
40this Part applies to the default scheme as if it had been made by the
authority.

Revisions to and replacement of scheme

5 (1) For each financial year, each billing authority must consider
whether to revise its scheme or to replace it with another scheme.

(2) 45The authority must make any revision to its scheme, or any
replacement scheme, no later than 31 January in the financial year

preceding that for which the revision or replacement scheme is to
have effect.

(3) The Secretary of State may by order amend sub-paragraph (2) by
substituting a different date.

(4) 5If any revision to a scheme, or any replacement scheme, has the
effect of reducing or removing a reduction to which any class of
persons is entitled, the revision or replacement must include such
transitional provision relating to that reduction or removal as the
authority thinks fit.

(5) 10Paragraph 3 applies to an authority when revising a scheme as it
applies to an authority when making a scheme.

(6) References in this Part to a scheme include a replacement scheme.

Arrangements to deal with shortfall in council tax receipts

6 (1) In this paragraph “scheme authority” means, in relation to a
15scheme and a year—

(a) the billing authority which made the scheme, and

(b) any major precepting authority with power to issue a
precept to that billing authority in relation to that year.

(2) Two or more scheme authorities may make arrangements which
20are to have effect if, as a result of the operation of the scheme—

(a) there is a deficit in the billing authority’s collection fund
for that year, or

(b) the billing authority estimates that there will be such a
deficit.

(3) 25Arrangements under this paragraph may include—

(a) the making of payments by one scheme authority to
another scheme authority;

(b) the variation of any payment or instalment of a payment
which is required to be made under regulations under
30section 99 of the 1988 Act (regulations about funds) that
make provision in relation to council tax.

Provision of information to the Secretary of State

7 (1) The Secretary of State may serve on a billing authority in England
a notice requiring it to supply to the Secretary of State such
35information as is specified in the notice and required by the
Secretary of State for the purpose of exercising, or of deciding
whether to exercise, any function relating to schemes.

(2) The authority must supply the information required if it is in its
possession or control, and must do so in such form and manner
40and at such time as the Secretary of State specifies in the notice.

(3) If an authority fails to comply with sub-paragraph (2), the
Secretary of State may exercise the function on the basis of such
assumptions and estimates as the Secretary of State thinks fit.

(4) In exercising, or deciding whether to exercise, any function
relating to schemes, the Secretary of State may also take into
account any other available information, whatever its source and
whether or not obtained under a provision contained in or made
5under this or any other Act.

Guidance

8 In exercising any function relating to schemes, a billing authority
must have regard to any guidance issued by the Secretary of State.

Transitional provision

9 (1) 10The Secretary of State may by regulations make such transitional
provision regarding the commencement of schemes as the
Secretary of State thinks fit.

(2) Such provision may include, in particular, provision for and in
connection with treating a person who is or was in receipt of
15council tax benefit, or who makes or has made a claim for that
benefit, as having made an application for a reduction under a
scheme.

Section 13A

Schedule 1A Council tax reduction schemes: Wales

Interpretation

1 20In this Schedule—

(a) “the regulations” means regulations under section 13A(4);

(b) “scheme” means council tax reduction scheme under the
regulations;

(c) “specified” means specified in the regulations;

(d) 25“specified authority” means a person or body required by
the regulations to make a scheme (and, in relation to a
particular scheme, means the authority which made the
scheme or is under a duty to make it).

Application of schemes

2 (1) 30The regulations may—

(a) prescribe, for each scheme that is to be made, the dwellings
to which that scheme is to apply;

(b) require each scheme to state the dwellings to which it is to
apply.

(2) 35The regulations may prescribe—

(a) the date by which each scheme is to be made, and

(b) the first financial year to which it must relate.

Persons entitled to reductions

3 (1) The regulations may prescribe—

(a) classes of person who are to be entitled to a reduction
under schemes;

(b) 5classes of person who must not be entitled to a reduction
under schemes.

(2) The regulations may—

(a) allow specified authorities to determine (subject to
regulations under sub-paragraph (1)) classes of person
10who are to be entitled to a reduction under schemes, or

(b) provide that specified authorities may not determine such
classes.

(3) The regulations may require each scheme to state the classes of
person (prescribed under sub-paragraph (1)(a) or determined
15under sub-paragraph (2)(a)) who are to be entitled to a reduction
under the scheme.

(4) Any class of person prescribed under sub-paragraph (1)(a) may be
determined by reference to, in particular, the matters listed in sub-
paragraph (7).

(5) 20The regulations may require any class of person determined under
sub-paragraph (2)(a) to be determined by reference to specified
matters (which may include those listed in sub-paragraph (7)).

(6) If the regulations do not require a class of person to be determined
as mentioned in sub-paragraph (5), the specified authority may
25determine that class by reference to, in particular, the matters
listed in sub-paragraph (7).

(7) Those matters are—

(a) whether the Welsh Ministers consider, or the specified
authority considers, any person to be in financial need;

(b) 30the income of any person liable to pay council tax in
respect of any dwelling to which a scheme is to apply;

(c) the capital of any such person;

(d) whether any such person is in receipt of any specified
benefit;

(e) 35the income and capital of any other person who is a
resident of the dwelling, or whether any such person is in
receipt of any specified benefit;

(f) the number of dependants of any person within paragraph
(b) or (e);

(g) 40whether the person has made an application for the
reduction.

Reductions

4 (1) The regulations may prescribe reductions, including minimum
and maximum reductions, to which persons in each class (whether
45prescribed under paragraph 3(1)(a) or determined under
paragraph 3(2)(a)) are to be entitled under schemes.