24 June 08 Views sought on rates deferment scheme for home owning pensioners

Finance Minister, Nigel Dodds, today published plans to introduce a rate deferment scheme for pensioners who own and occupy their own home.

The proposals would provide eligible home owning pensioners, age 65 and over, with the possibility of deferring rates, subject to certain conditions.  These include minimum equity levels in the property and it being their main residence.  Views are welcomed during the consultation process on the policy detail and the various impact assessments.

Outlining details of the plans, the Minister pointed out that the scheme was entirely voluntary and said:  “This scheme will enable pensioners,who own their own homes and who are ineligible for means tested rate relief or housing benefit, to postpone payment of their rates bill”.

“This forms part of a wider package of measures that the Executive has targeted towards pensioners.  A new lone pensioner allowance was introduced in April, providing a 20% reduction for pensioners aged 70 or over who live alone.  It is not means tested.  The level of savings that pensioners can hold under the rate relief scheme, meanwhile, has been increased to £50,000 from April this year”.

However, Mr Dodds cautioned that this is not a new form of relief nor is it another allowance - rather it provides a payment choice allowing rate bills to be conditionally postponed.

Even if someone is eligible to defer rates, entering into a deferment agreement requires careful consideration and expert advice will need to be sought before decisions are made.Itis a complex matter, which involves a long term financial commitment, contractual issues and will ultimately impact on a participant’s equity in their property.  All of these factors will need to be weighed up before reaching a decision, but this will offer an opportunity to defer rates where pensioners are finding it difficult financially and may be considering downsizing.

The Minister added: “In recognition of the difficult decisions involved, it is proposed that participants would be made fully aware of the possible financial implications of the scheme, through independent advice”.

Mr Dodds, stated that, as with other rating consultations currently underway, he wanted to encourage as full and varied a response as possible.  He continued:  “I am particularly interested in views on how the scheme could work in practice, eligibility and the financial implications.  I want to ensure that local people, and those most affected, have a key part in shaping the detail of this new policy”.

The consultation paper provides background to the Executive decision to introduce a deferment scheme and examines a range of policy issues including eligibility, the imposition of a statutory charge on the property, the possible financial impact and the provision of advice to potential participants.  Consultation will last for 12 weeks before final decisions are taken on the way forward.

It is expected that the legislation governing the deferment scheme would be in place during 2009.  

1.If take up is in the region of 2.5% the revenue cost, to be recouped at a later date, would be in the region of £2m.

2.Copies of the consultation paper and initial integrated impact assessment are available on http://www.ratingreviewni.gov.uk.  Hard copies can also be provided on request by contacting Rating Policy Division.

3.Consultation will last for 12 weeks, ending on 16 September 2008.

4.Written responses should be sent to:

Rating Policy Division

Department of Finance and Personnel

Room D12, Decant Annex

Rathgael House

Balloo Road

Bangor
BT19 7NA

E-mail responses may be sent to: ratingpolicy@cfg.dfpni.gov.uk.  Alternatively, responses may be faxed to 028 9185 8008.

5.Media enquiries only to DFP Communications Office on 028 9052 7644 or 028 9052 7375.  Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.