Everyone of working age – including the unemployed – will be expected to pay at least 15 per cent of their council tax under a new system proposed in Harborough district.
Owners of vacant properties would also have to pay full council tax after a month.
Under changes to the national council tax support scheme, each authority is getting 10 per cent less from central Government.
If adopted in January, Harborough District Council's proposed scheme would create a benefits cap of 85 per cent for claimants of working age.
It would come into force in April.
Council leader Mike Rook said: "We will be getting less money from the Government to fund the benefits we give out. So we need to have a scheme in place which is affordable within the funding available, while seeking to protect the most vulnerable."
Pensioners and war widows will be exempt to the changes and receive full council tax benefits.
He said: "We also felt that a discretionary fund should be created to help those who fit the criteria and deserve extra support based on their particular circumstances. This new scheme will allow us to be financially sustainable."
The fund of £35,000 will allow the council to support the most vulnerable residents on a case-by-case basis.
He said there would also be a reduction in the existing discounts for vacant properties, encouraging empty properties to be brought back into the rental market. Vacant properties would be exempt from council tax for a month, with owners required to pay full tax after that period.
