The role of means-testing within social policy has become more important and more central in the 1990s. However, extensive reliance on means-testing brings with it the accompanying problems of the unemployment and poverty traps. In the 1990s these take on more of the form of a poverty plateau, accentuated by a new savings trap. This article uses hypothetical calculations of benefit entitlement in order to explore the extent of the poverty plateau, and looks in particular at the impact on this of the growing use of means-tested rebates by local authorities. Means-tested rebates have been developed by authorities because of a concern that the new charges for services that they are making might disadvantage poor local citizens. Drawing on work of one typical authority, this article reveals that these rebates do add significantly to the poverty plateau, and yet that this is an issue which is little understood by both local and national policy planners.