Families living on low incomes and currently receiving council tax benefits could be expected to pay more each year as part of changes by the Government.
From next April, councils will take over provision of tax benefits from the Government - which is to provide councils with fixed grants at about 90 per cent of the amount currently paid.
This means Rotherham Council face a £2.8 million funding cut, on top of the £14 million savings the authority will have to make next year.
The council is currently considering a number of options to address the funding shortfall.
These include making working age benefit claimants paying more, increasing council tax and using council budget resources.
If the council opts to make working age benefits pay more than some of the area’s poorest families, excluding pensioners, could see their council tax benefits payments cut by as much as 17 per cent.
Rotherham Council leader Coun Roger Stone slammed the coalition Government for failing to help people understand the issues and for ‘misleading’ the public with ‘inaccurate figures about the changes.’
He was responding to claims made in Parliament by local government minister Andrew Stunell that the authority’s funding gap is £1.8 million and could be covered by using new powers to tax second and empty homes, as this would raise £1.9 million.
Coun Stone said: “Using figures that mislead and hide the problem that people in Rotherham and similar places will face through loss of support is at best unhelpful, and further confuses what is a very complex set of changes to council tax benefit, and council tax discounts and exemptions.”
“Now that we have had a chance to work through the implications of what the coalition Government is proposing, we can see this is very inaccurate, and very misleading.”
He said the authority had calculated the funding loss at around £2.8 million, but said it has the potential to rise to £4.1 million because of possible council tax increases and increased take up of the new discount compared to the existing benefit.
Coun Stone added: “The additional income that could be generated by the changes in discounts and exemptions will not be sufficient to close the gap. It will be nowhere near.”
A spokesman for the government’s Department of Communities and Local Government said councils would be able to keep part of business rates they collect in future and vulnerable people, like pensioners, will be protected.
He added: “Councils will be much better placed to attract new business and industry and better placed to help their residents get off welfare and reap the benefits of work instead.”