What is Council Tax Reduction?

In April 2013, the Government abolished the national Council Tax Benefit scheme for working age customers and asked each Council to replace it with a local scheme called Council Tax Support, now called Council Tax Reduction.

Council Tax Reduction is a local scheme designed to help people on low incomes pay their Council Tax. Pensioner claims for Council Tax Reduction are determined according to a national scheme, which is set by the government.

The national scheme compares a customer's income and capital to an applicable amount, which is the amount the government says a person needs to live on - based on their age, household and any disability. Under the national scheme, a customer can receive up to 100% help towards their Council Tax. A non-dependant deduction for other adults in the property, other than the customer and their partner, usually reduces entitlement - the amount depending on the non-dependant's income. No non-dependant deduction is taken if the customer or their partner is in receipt of Attendance Allowance, Disability Living Allowance Care Component or the Daily Living part of Personal Independence Payment.

Check if you are entitled to Council Tax Reduction under the national Pension Age scheme

Working Age Scheme from April 2020

Following a consultation in Autumn 2019, the council’s Council Tax Reduction Scheme (formerly known as Council Tax Support) for working age customers is changing from 1 April 2020. State Pension age customers are not affected by these changes, unless they are in receipt of a working age benefit - such as Income Support, Employment and Support Allowance, Jobseekers' Allowance or Universal Credit.

The scheme is based on an Income Grid – depending on the applicant's income and family circumstances.

Some of the main features of the working age scheme are:

  • the capital limit is £6,000 - anyone with capital above this level won't qualify;
  • there are no non-dependant deductions;
  • those who have been self-employed for more than 12 months and who are earning less than the equivalent rate of 30 hours at the National Minimum Wage (or the National Living Wage for those aged 25 or over), minus the relevant amount of tax, National Insurance and 50% of any pension contribution, will have this level of self-employed income applied to their claim;
  • claims and changes of circumstances take effect from either the date they are received or the date the change happened;
  • claims can be backdated for up to 3 months from when the request is received.

Income Grid 2020/21

Council Tax Reduction level Passported* Single** Couples** Families with one child** Families with two or more children**
Level 1 – 90% Relevant Benefit £0 – £74.99 £0 – £117.99 £0 – £181.99 £0 – £246.99

Level 2 – 75%

N/A £75 – £104.99 £118 – £152.99 £182 – £221.99 £247 – £291.99
Level 3 – 50% N/A £105 – £134.99 £153 – £187.99 £222 – £261.99 £292 – £336.99
Level 4 – 25% N/A £135 – £164.99 £188 – £222.99 £262 – £301.99 £337 – £381.99

* Passported / Relevant Benefit includes customers on income-based Jobseekers' Allowance, income-related Employment and Support Allowance, and Income Support.
** Weekly eligible income (£) – all income received by the applicant and any partner, excluding any income detailed in the income disregards detailed below.

Income disregards

The following benefits are disregarded in full when working out a customer's weekly eligible income:

  • Armed Forces Independence Payment
  • Attendance Allowance
  • Bereavement Support Payment for one month
  • Carer's Allowance, Child Benefit
  • Disability Living Allowance
  • Personal Independence Payment
  • Support component of Employment and Support Allowance
  • Universal Credit Housing Costs (pro-rata amount where full Universal Credit is not being paid)
  • War Widow(er)'s Pension
  • War Disablement Pension, including Service Attributable Pensions.

A full list can be found in Schedule 4 of our Council Tax Reduction Scheme Policy.

In addition, the first £20 of earnings are income disregarded per claim where the claimant and/or partner are working. Tax, National Insurance and 50% of any pension contributions will continue to be disregarded from earned income.

Apply for Council Tax Reduction

For each working age resident in receipt of a discount under our Council Tax Reduction scheme, the government has provided additional funding to enable us to further reduce their Council Tax liability for 2020/21 by up to £150.00 due to the COVID-19 situation. If a customer qualifies for this discount, it is applied automatically and will show on their bill as a COVID-19 Hardship Payment.

If this additional payment, along with the instalments you have already paid, puts your account into credit for 2020/21, you can request a refund.

We have only been provided with funding for working age customers, since the national scheme for pensioners already allows up to a 100% reduction based on the customer's circumstances.

If a customer of either working or pension age cannot afford the shortfall between their weekly Council Tax Reduction and their weekly Council Tax liability, they can apply for Council Tax Reduction Hardship Assistance. This also applies to customers who were previously entitled to Council Tax Reduction on 31 March 2020 but the changes to the scheme mean that they are no longer entitled.

View our Council Tax Reduction Policy for 2020/21 and previous policy documents.

Last updated: 02/09/2020 12:13

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