Thousands of people who claim benefits are facing paying a council tax bill for the first time as new rules come into force.
From April 1, South Kesteven District Council will pick up the bill for council tax benefits, exemptions and reductions. But it will have about £1m - or 10 per cent - less than the Government spent when Westminster provided the service.
The changes mean that people of working age who did not pay any council tax will now have to pay at least 20 per cent towards their bill. This will affect about 5,000 people across the district.
The council has set up a contingency fund of £30,000 to help the hardest hit. It will give financial support to low- income families adversely affected by these changes.
Pensioners, disabled people and war veterans are protected from the changes.
District council leader Linda Neal (Con) said the council had recognised the changes would cause “real difficulties for some residents”, which is why the hardship fund had been put together.
How this fund will be distributed will be discussed by the resources policy development group on Thursday, March 28.
Coun Neal said: “Central government is abolishing the national housing benefits system and has instructed every council to replace it with a local scheme.
“This means we have had some difficult decisions to make and it’s fair to say we have looked at many different variations because we wanted a scheme which helped us make savings but also supported the most vulnerable in our community.”
The district council consulted on the council tax changes in the autumn.
More than 55 per cent of those contacted said people of working age should contribute something; 77 per cent said people with disabilities should be protected and 71 per cent agreed that war pensioners should be protected.
Those on housing benefit will also have their benefits cut if they have more bedrooms than the Government believes they need.
It only affects people of working age, who claim housing benefit and are renting from a social landlord.
The new rules state you need one bedroom for each adult couple, anyone over the age of 16, two children of the same sex under 16, two children under the age of 10 regardless of their sex or a carer.
If a resident has one bedroom more than they need, the housing benefit will be cut by 14 per cent and two bedrooms more than they need will see the benefit cut by 25 per cent.
A cap on benefits will also be introduced in April to encourage people of working age to find a job. The maximum weekly benefit for a single person will be £350 a week or £500 a week for a couple.
In Rutland, those of working age will have to pay at least 25 per cent towards their council tax bill.
Rutland County Council has also set up a fund of £100,000 to help those hit by the changes .
About 800 people are affected in Rutland.
Cabinet portfolio holder for finance Terry King (Con) said: “Every council in the country has had to take some tough decisions in the last few months and Rutland is no exception.
“We recognise that these changes will be difficult for some and are doing everything possible to support them.
“This includes the introduction of a discretionary support scheme to provide short-term assistance for the most vulnerable members of our community and those facing financial hardship.”