Council Tax Reduction

Council Tax Reduction – CTR (formerly known as Council Tax Benefit and also known as Council Tax Support) is a means tested benefit which helps those on a low income meet the cost of paying their Council Tax bill. This benefit is administered locally, with differences in the level of support available in England, Scotland and Wales. Northern Ireland uses an equivalent rates system.

Differences in CTR across Great Britain

England

Support is administered locally, so there could be differences between the level of reduction available from different local authorities. In order to find out what support is available in your area, use the gov.uk English local council finder tool.

There are two important points you should note about claiming CTR in England. Firstly, councils cannot make changes to their scheme during a billing cycle and secondly, those who have reached Pension Credit age must get the equivalent level of reduction which was available under the old Council Tax Benefit scheme.

Scotland

In Scotland the devolved government decided it wanted all local councils to ensure the same level of support is made available across the country. In addition, it also wanted to ensure payments under the new scheme would not be less than what was available under the old Council Tax Benefit arrangements. This policy was implemented via the creation of a national CTR scheme.

You can find you local council in Scotland using the gov.scot Scottish local council finder tool.

Wales

In Wales, the devolved  Welsh assembly government also took the decision to ensure payments under CTR matched those available under Council Tax Benefit, and like in Scotland, decided to set up a national Tax Reduction scheme.

Eligibility Criteria

Below is the main criteria you must meet in order to claim CTR…

  • You must live in the property for which you wish to claim
  • You must be the person responsible for paying Council Tax
  • You must pass the “habitual residence” test
  • You must not be subject to immigration control
  • Your capital must not exceed the maximum qualifying amount
  • Your income must not exceed the maximum qualifying amount

You can also still claim CTR even if you are receiving other reductions, for example if you live on your own and are receiving the single person’s discount.

How is your amount of capital worked out?

The amount of capital you have (including joint total capital if you are a couple living in the same property) will affect your right to claim.

Capital is worked on based on the following criteria…

  • Property you own (excluding the property you live in)
  • Savings accounts
  • Stocks and Shares
  • Most one off lump sums, e.g redundancy payments

Below is an illustrative example of how various capital amounts affect how much money you can claim

TOTAL CAPITALIMPACT TYPE
£6,000 or lessWill not impact your right to claim so long as you're below the qualifying age for Pension Credit
£10,000 or lessHas no impact so long as you (or your partner) are over the qualifying age for Pension Credit.
£6,000 to £16,000Can still get the benefit but your assumed income from your capital will be calculated
Over £16,000Cannot claim unless you or your partner receives the guaranteed part of Pension Credit

Discounts

If you are a single person…

A single person can normally receive a 25% reduction in the Council Tax bill. However there are some other people who can live in the same property who are not counted as a “second person”, including…

  • Apprentices
  • Those in approved training (under 25)
  • Full time students (under 20)
  • Carers working over 35 hours (not a husband/wife of main occupier)
  • Student Nurses
  • Monks & nuns

If you are a student…

Full time students are exempted from paying Council Tax so long as the course enrolled upon lasts for more than one year and has at least 21 hours of study per week.

Those studying up to A level standard must attend a course that lasts for a minimum of three months and have a minimum of 12 hours per week in study time.

If your house is empty…

If your house is empty (and you have not moved in with someone else to care for them) you can receive upto 50% discount on your council tax – although the amount of reduction is decided by your local council.

If you own a second home…

Discounts for those who own a second home (e.g a holiday home) are administered by local authorities. Typically the discount will upto 50% on the total amount.

If you are a Pensioner…

Your right to claim CTR as a pensioner will depend on whether you have reached the age where you also qualify for Pension Credit. For women, the age at which you become eligible for pension credit is the same age you become eligible for a state pension. For men however, the age you can claim Pension Credit maybe different from your state pension age. You can use this free online calculator to work out when you claim Pension Credit.

There are several different factors your local authority will look at when you submit a claim for CTR including whether…

(i) You are claiming (or are eligible to claim) Pension Credit.

You will be eligible for CTR, depending on what type of pension credit you receive

(ii) You claim the guarantee part of pension credit

If you claim the guarantee part you will be able to claim a full reduction in your council tax, and your capital and income will not be considered. However the level of reduction can be reduced if you have what is classed as ‘non dependent adult’ living with you.

(iii) You only claim the savings part of pension credit

Should you only be receiving the savings part of pension credit, you will be entitled to receive CTR so long as your capital (including your partner’s) is not above £16,000. However, if your total capital were to rise above this amount, you will need to inform your local authority as this will affect your future eligibility for CTR.

Pensioners who are not claiming Pension Credit

Those pensioners who are not in receipt of Pension Credit maybe still be eligible to claim CTR, so long as their income and capital does not exceed £16,000. Citizens Advice Bureau have a comprehensive guide on this topic, with full information on how your income and capital will be calculated.

Severe Disability Premium

Those pensioners who are severely disabled maybe eligible for an additional Severe Disability Premium which will further increase the level of CTR they can claim. There are two different types of disability premium – one for single people and one for those who are a couple but it should be noted that both of you need meet the qualifying criteria.

If you are a lone or single parent and meet the qualifying conditions you can also make a claim so long as you…

  • Don’t have any non-dependants living with you
  • Don’t have anyone claiming carer’s allowance for you
  • Are also receiving certain other benefits (including attendance allowance, higher or middle rate DLA, the daily living component of PIP or armed forces independence payment)

What is the second adult rebate?

This a rebate you can claim on your council tax bill which is available to those who have a second adult who is living with them and is also on a low income. The amount that will be awarded in this instance will depend upon the income level of the second adult living in the same household. Thus, it is only the income of the second adult that is calculated – the amount of capital they may have is ignored. It should also be noted you cannot claim a second adult rebate and a CTR together – your local authority will award whichever benefit has the higher amount.

How and when is CTR applied?

CTR once awarded is automatically deducted from your Council tax bill. If you are awarded a 100% reduction, your council tax liability will in effect be nil.

How to report a change in circumstance

It is very important the you report any changes in personal circumstance without delay, as this could impact your right to claim. For example if your income and/or capital were to increase, you may not remain eligible to keep receiving a CTR. You also need to inform your local authority if there are changes to certain other benefits you are receiving, including income support, income-based JSA and income-related ESA.

Pension Credit

If you receive Pension Credit then you should in the first instance report any changes which would impact your right to claim CTR to the pension service (whilst also informing your local authority)

How to launch an appeal

If you do not agree with the decision your local authority has made or the level of the reduction applied to your bill you have the right to appeal to the Valuation Tribunal Service. This body is independent of the council and will adjudicate on whether to uphold or overrule the decision of your local authority.

FAQ’s

Below is a list of the most common frequently asked questions regarding CTR.

What are discretionary reductions?
Can I backdate payments?
What is an invisible person?