What is Council Tax Reduction?
Council Tax Reduction is a local scheme to help people on a low income, in or out of work, or in receipt of state benefits. The amount you can receive depends on your income and circumstances and is shown as a discount on your Council Tax rather than being paid as a benefit.
Pension Credit age people
For applicants of pension credit age, the Government has set the rules we must use to calculate Council Tax Reduction.
Working age people
For applicants of working age, the current local scheme adopted by this Council is an income banded scheme. The reduction is based on the net income of the applicant, and their partner if they have one.
The income bands are set out in the table below:
Weekly Income levels
Couple with no children or young person
Couple or Lone Parent with one child/young person
Couple or Lone Parent with two or more children/young persons
£0 - £79.99
£0 - £119.99
£0 - £179.99
£0 - £239.99
£80 - £129.99
£120 - £169.99
£180 - £229.99
£240 - £299.99
£130 - £179.99
£170 - £219.99
£230 - £279.99
£300 - £349.99
£180 - £259.99
£220 - £299.99
£280 - £379.99
£350 - £449.99
The basics of the scheme for working age people are:
- The maximum discount that can be paid is 80%. Therefore, people liable for council tax must pay at least 20%.
- Anyone with savings above £6,000 will not qualify.
- Applicants will receive a discount of 80%, 60%, 40%, 20% or no discount, depending on the level of their income and the income band they fall into.
- Those receiving a passported benefit – ie Income Support, Jobseeker’s Allowance (income-based) or Employment and Support Allowance (income-related) will automatically be placed into Band A (ie 80% discount).
- The income ranges above are weekly amounts.
- Examples of income are earnings, self-employed earnings, tax credits, pensions, student grants/loans, Jobseeker’s Allowance (contributions), Employment and Support Allowance (contributions).
- Net weekly income will be taken into account when calculating Council Tax Reduction.
- Net income means once income tax, national insurance and half of any personal pension is deducted from a person’s earnings.
- To support incentives to work, £25 per week will be disregarded from the applicant’s net earnings and only one disregard shall be applied per claim.
- Income from Disability Living Allowance, Personal Independence Payments, Armed Forces Independence Payments, Child Benefit, Child Maintenance, and War Disablement Benefits will continue to be disregarded when calculating Council Tax Reduction.
- Income from Carer’s Allowance will also be disregarded in full.
- Where the applicant would have been entitled to any disability premium (eg child disability, enhanced disability or severe disability) under any previous scheme, the amount equivalent to the value of the premium (as determined under the Housing Benefit Regulations 2006) shall be disregarded from the applicant’s total net income.
Full details of the scheme are available below.
Details of previous year Council Tax Reduction Schemes