Council Tax Reduction Consultation

The consultation is now closed.

The information collected as part of the consultation is now being analysed and will contribute to the final Council Tax Reduction Scheme. 

To keep up to date with the outcome of the consultation please sign up to our email newsletter.


There are 11 proposals that we would like your views on. Each of the proposals is shown below with an explanation, the circumstance for the proposal, and suggested benefits and drawbacks.

Some proposals may affect you more than others, please take the time to look at all of them particularly if you are currently in receipt, or likely to be in receipt of Council Tax Support.

The current scheme for Council Tax Reduction is largely based on the previous Council Tax Benefit scheme, which was assessed alongside Housing Benefit. Housing Benefit for working-age applicants is being phased out and for most new claimants is no longer available. Whilst Housing Benefit was the main provider of housing support for working-age people, it was logical to maintain a Council Tax Reduction Scheme that mirrored this approach. Now that Universal Credit is being rolled out, this gives the Council the opportunity to significantly simplify what is in effect a Council Tax discount.

It is proposed that a simplified income ‘grid’ scheme will be introduced as follows:

Council Tax Reduction level Passported * Single** Couples** Families with one child** Families with two or more children**
Level 1 – 90% Relevant benefit £0 – £73.99 £0 – £115.99 £0 – £179.99 £0 – £243.99
Level 2 – 75% N/A £74 – £103.99 £116 – £150.99 £180 – £219.99 £244 – £288.99
Level 3 – 50% N/A £104 – £133.99 £151 – £185.99 £220 – £259.99 £289 – £333.99
Level 4 – 25% N/A  £134 – £163.99 £186 – £220.99 £260 – £299.99 £334 – £378.99

* Passported / relevant benefit includes customers on income-based Jobseeker’s Allowance, income-related Employment and Support Allowance and Income Support.
** Weekly Eligible Income (£).

Please note: that amounts will be subject to annual uprating.

When deciding which amount of discount (level 1 - 4 in the grid) is appropriate the following will be taken into account:

  • the level of discount shown in the grid will be based on the total net income (determined by the Council) of the applicant (and any partner);
  • income levels can fluctuate within  the levels of income  appropriate to the household size without this affecting the amount of discount awarded;
  • applicants who have a total net income of less than the amount in Group 1 will receive a discount of 90% against their liability for Council Tax. This will also apply to those applicants receiving Income Support, income-related Employment and Support Allowance and income-based Jobseeker’s Allowance (passported / relevant benefits). Where applicants are not in receipt of those benefits and their income is above the amount specified in Level 1, Council Tax Reduction will be awarded at the appropriate amount (Level 2, 3 or 4). The upper limit of 90% represents an increase in the maximum amount of discount available to the lowest income families;
  • applicants who have a total net income amount above those shown in the grid will receive no discount;
  • the grid will be limited to a maximum of two dependants which brings the scheme in line with other Government Benefits and Credits (see Proposed Change 2);
  • removing the Protected group category and replacing it with a targeted Exceptional Hardship Scheme based on individual requirements (Proposed Change 3);
  • no charges (deductions) within the Council Tax Reduction awarded will be made for non-dependants who live with the applicant (see Proposed Change 4);
  • the current earnings disregards will be removed and replaced with a standard disregard of £20 per week for all applicants who work (see Proposed Change 5);
  • certain incomes will continue to be disregarded, including Disability Living Allowance, Personal Independence Payments, Child Benefit,  War Widows / Widowers Pensions, War Disablement Pensions and Armed Forces Independence Payment.; 
  • carer’s Allowance and the Support Component of Employment and Support Allowance received will be disregarded (see Proposed Change 6).

It is inevitable that there will be customers whose discount will increase or decrease compared to the level of discount they receive under the current scheme; however, the Council is keen to protect as many applicants as possible. The Council is not minded to reduce the overall level of support available within the scheme, but there will be a redistribution of support in some cases. Where an applicant experiences exceptional hardship, they will be able to apply for additional support from the Council under the Exceptional Hardship Payment Scheme, which will continue as at present.

The benefits of changing the scheme are:

  • it provides a simpler scheme that will be more easily understood by applicants;
  • it will save significant increases in administration costs due to the introduction of Universal Credit;
  • it will prevent applicants receiving multiple Council Tax bills during the year, preventing multiple changes to monthly instalments; and
  • applicants on low incomes or on a ‘relevant benefit’ may receive more support that in the current scheme.

The drawbacks of doing this are:

  • whilst the Council will look to protect applicants as far as possible, there may be customers whose discount will decrease; and
  • some households with more than two children may receive less support than currently, but the scheme will then mirror the way that other Government Benefits and Credits operate.

Within the current scheme, applicants who have children are awarded a dependant’s addition within the calculation of their needs (Applicable Amounts). From April 2017, the current scheme limited dependant’s additions in line with Universal Credit, Housing Benefit and Tax Credits to a maximum of two. Some applicants were protected - where they made a claim for reduction before that date and already had more than two dependants. The new scheme will be based on an income grid system that takes into account the number of dependants within the household; however, it will be limited to two for all applicants.

The benefits of this option are:

  • Council Tax Reduction will be brought into line for all applicants; and
  • it is simple and administratively easy to incorporate it within the scheme.

The drawback of doing this is:

  • applicants who have three or more dependants and who claimed before 1st April 2017 may receive less Council Tax Reduction. However, if the applicants face exceptional hardship, they may apply for additional support through the Council’s Exceptional Hardship Payment scheme.

The current scheme has ‘blanket’ protections for certain applicants, including where:

  • the applicant or their partner is in receipt of a severe disability premium within the calculation of Council Tax Support or within any means-tested benefit (Housing Benefit, Income Support, income-related Employment and Support Allowance or income-based Jobseeker’s Allowance);
  • the applicant, their partner or any dependant is in receipt of an enhanced disability premium within the calculation of Council Tax Support or within any means-tested benefit (Housing Benefit, Income Support, income-related Employment and Support Allowance or income-based Jobseeker’s Allowance); 
  • the applicant or their partner receives a War Disablement Pension, a War Widow’s/Widower's Pension, an Armed Forces Independence Payment or any similar payment from another country;
  • the applicant or their partner have moved to Universal Credit and would have met the qualifying criteria for the severe disability premium;
  • the applicant or their partner is in receipt of a Support Component within the calculation of their Employment and Support Allowance; 
  • the applicant or their partner is in receipt of the limited capability for work related activity element in their Universal Credit award.

These applicants are protected from the reduction in support (of 25%), the reduced capital level (which for the Protected group is £16,000 and for all other applicants is £6,000), the Minimum Income Floor for self-employed applicants, the minimum support level of £2.50 per week and Second Adult Reduction (which has been removed for all other applicants).

The proposal is to remove all protections given irrespective of circumstances and replace them with a targeted Exceptional Hardship Scheme that will be considered for each applicant applying for additional support.

The benefits of this proposed change are:

  • it will make the administration of the scheme simpler;
  • it will allow us to target additional support to applicants who are suffering exceptional hardship rather than specific groups; and
  • it will be fairer to all applicants (at present, protection is applied to certain groups automatically - irrespective of income or circumstances); and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • some applicants who were in the Protected group may have to apply for additional support rather than automatically receive it.

Currently, where an applicant (and their partner if they have one) has other adults living with them - such as adult sons, daughters etc. - their Council Tax Reduction may have an amount deducted. Any charge made is called a Non-Dependant Deduction. The Council currently makes a range of deductions, depending on the circumstances of the non-dependant. In theory, the applicant should look to recoup this deduction from those adults. 

The benefits of this proposed change are:

  • applicants will not be penalised for having additional adults living with them (other than if they are living there commercially); and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • there may be a cost to the scheme but overall we will remain within the available funding.

When an applicant (or their partner if they have one) has earnings and works over 16 hours per week, an earnings disregard is applied - depending on their individual circumstances. The standard disregards (only one is awarded) are £5 per week for a single person, £10 per week for a couple, £20 per week if they meet certain conditions (such as disablement or part time special employments) and £25 for lone parents. If they work additional hours, in some circumstances, they may receive an additional £17.10 disregard per week. Also, if childcare is paid for, above that received free from Central Government, then further disregards can be made against earnings for monies paid out.

The proposed change to the scheme would introduce a standard, single disregard of £20 for all applicants if they work, irrespective of the number of hours they work per week. All other disregards would be removed.

The benefits of this proposed change are:

  • it will make the administration of the scheme simpler; 
  • it will be more generous to some applicants on low incomes and encourage work – this is particularly relevant to single people and couples with no children (it should be noted that applicants with dependants will be allowed a higher level of income within the ‘income grid scheme’ proposed); and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • there may be applicants with larger families and higher child care costs (not met by Government schemes) that may see a reduction in support (it should be noted that all applicants who face exceptional hardship may apply for additional support under the Council’s Exceptional Hardship Payments Scheme).

Where an applicant (or their partner if they have one) receives Carer’s Allowance or the Support Component of Employment and Support Allowance, the payment they receive is considered as income for Council Tax Reduction. This is partially offset by an award of Carer’s Premium or by the Support Component within the current scheme. With the move to an income-based ‘grid’ scheme, the use of premiums etc. will end. The Council feels that it is fair, in these cases, to fully disregard any payment of Carer’s Allowance or the Support Component of Employment and Support Allowance received.

The benefits of this proposed change are:

  • it may be more generous to applicants who receive Carer’s Allowance; and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • there may be a small (negligible) increase in scheme costs.

In certain cases, where applicants have been in receipt of prescribed benefits (such as Income Support, Jobseeker’s Allowance or Employment and Support Allowance) and have moved into work that ends their entitlement, Council Tax Reduction can be paid for an additional 4 weeks after they have commenced work or increased their hours. Similar provisions do not exist for Universal Credit claimants. As Universal Credit is to replace these existing (legacy) benefits, the Council feels that such provisions are no longer appropriate.

The benefits of this proposed change are:

  • it will make the administration of the scheme simpler;
  • it will treat all applicants in receipt of DWP benefits equally; and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • applicants who are still in receipt of legacy benefits and who move into work before being transferred to Universal Credit may lose any potential extended payment.

New claims and changes in circumstances that affect entitlement to Council Tax Reduction under the current scheme are largely effected on a weekly basis. This is a ‘throwback’ to previous benefit schemes that were weekly-based. As Council Tax is a daily charge, the Council believes it makes more sense to change entitlement to Council Tax Reduction to a daily basis. It should be noted that the proposed new scheme is designed to reduce the number of changes that will affect entitlement in any event.

The benefits of this proposed change are:

  • it will make the administration of the scheme simpler;
  • it is in line with the way that Council Tax is charged and operated; and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this:

  • There may be a small change in the date when a customer’s discount decreases after an increase in income, however in most cases this will be balanced against the claim starting on the date that income decreased. 

The current scheme allows the backdating of applications for up to 1 month where ‘good cause’ is proven by the applicant. The proposal is to extend the backdating of claims by up to 3 months for all applicants who qualify from an earlier date. The Council feels that the current scheme is restrictive and does not want to penalise applicants who have a genuine reason why they have not applied for support.

The benefits of this proposed change are:

  • it will be fairer to all applicants
  • the change is simple and administratively easy to incorporate within the scheme.
  • it removes the outdated benefits provision of 'good cause'. 

The drawback of doing this is:

  • the change may slightly increase the cost of the scheme, although this will be offset by the reduction in uncollectable amounts.

The current scheme allows for all child maintenance payments to be disregarded, irrespective of the amount received by the applicant.

The Council now feels that this should be taken into account - as with any other income. By doing this, should any applicant feel they would suffer exceptional hardship, additional support will be available through the Council’s Exceptional Hardship Scheme.

The benefits of this proposed change are:

  • it will be fairer to those applicants who have children but who do not receive child maintenance; 
  • assistance will be more targeted through the Exceptional Hardship Scheme; and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • some applicants who do not wish to apply for additional support may be worse off.

The current scheme does not allow a Council Tax reduction to be granted where the Council is of the opinion that the applicant or their partner exceeds the ‘benefit cap level’ on state benefits.

The proposal is to remove this provision altogether as it is no longer relevant to Council Tax reduction.

The benefits of this proposed change are:

  • it will allow the scheme to be primarily discount-based; 
  • it may benefit some applicants who are subject to a ‘state benefit cap’; and
  • the change is simple and administratively easy to incorporate within the scheme.

The drawback of doing this is:

  • there may be a slight cost to the overall scheme.

Last updated: 9.31am on Tuesday 12 November 2019

  1. Introduction
  2. Proposals
  3. Give us your views
  4. Contact