RESIDENTS claiming council tax benefit in York could see the support they get fall by 30 per cent under a Government shake-up.

The decrease is one of three options which will be considered by City of York Council’s cabinet next week after the authority learned the funding it receives from Westminster will fall by £1.3 million next year, as a new Council Tax Support (CTS) scheme replaces the current benefit system.

Other possibilities include making no changes, leaving the council to plug the funding gap in 2013/14 which could mean cuts in other service areas.

Another option could be to reduce support for working-age benefit claimants by 8.5 per cent by accepting a “one-off” Government grant of £202,000 next year. However, this would still cost the authority £772,000 in 2013/14 and £1 million the following year.

The council must have its own CTS scheme set up by the end of January. Pensioners are protected from any cuts.

The cabinet’s decision will be debated at a full council meeting later this month.

“With existing funding cuts to accommodate over the next two years, Government funding reductions for CTS add further pressures,” said Coun Julie Gunnell, cabinet member for corporate services.

“We have worked with residents, businesses and partners to see how we can work together to bring in a local scheme and support people to pay their council tax bills, despite these challenges.”

A report for the cabinet meeting by Ian Floyd, director of customer and business support services, said a consultation on the issue had shown residents did not want the impact of the funding cuts to be passed onto them, but they “understood the position of the council”.

It said paying council tax benefit at its current levels next year would cost the authority £10.5 million and the expected Government funding is £9.2 million.

If council tax support for working-age claimants is capped at 70 per cent of the amount currently provided, the council may look at creating a “hardship fund” for residents left with “significant” problems paying their bills because of the new system.

Mr Floyd said: “The implementation of CTS and the significant reduction in Government funding leaves us with very difficult choices.”