Council tax reduction

Council tax reduction reduces the amount of council tax you have to pay if you have a low income. 

There are other ways to pay less council tax. Check your local authority's council tax discount scheme if you live alone, or someone in the household is a young person, a student or trainee, has a severe mental impairment or is a live-in carer. Check the disability reduction scheme if someone with a disabilty in your household uses an extra room or has space to use a wheelchair.

Timeline

April 2013       Council tax reduction introduced in Scotland.

It replaces the UK-wide council tax benefit.

Eligibility

You could get a council tax reduction if you're liable for council tax and your income is low enough. Any savings or capital must be under £16,000.  You could qualify even though your savings are more than £16,000 if you get the guarantee credit of pension credit. You must meet certain conditions about residence in the UK and immigration status.

There are two other kinds of council tax reduction: second adult rebate (also called alternative maximum council tax reduction) and reduction for properties in bands E to H. You can apply for all three kinds and you'll get the one that's worth the most.

What you get

The local authority works out how much reduction you're entitled to based on your income. If your income is low enough, you'll get the  maximum reduction.

The maximum reduction is usually 100 per cent of your council tax bill once any other discounts have been taken off.  The maximum may be less than 100 per cent if you have a 'non-dependant' living with you, for example, an adult son or daughter. Council tax reduction does not cover water and sewerage charges but if you get council tax reduction, you can also get a reduction of up to 25 per cent of unmetered water charges.

You're entitled to maximum council tax reduction if you get income support, income-based jobseeker's allowance, income-related employment and support allowance or guarantee credit of pension credit.

If you get universal credit, the local authority works out how much council tax reduction you're entitled to based on figures used to work out your universal credit award. To avoid changing your council tax reduction entitlement every time your income goes up or down, the local authority could decide to estimate your average income. 

You could get council tax reduction if you have a low income but don't get another benefit, for example, because your wages are low.

How you apply

Apply to your local authority. If you claim housing benefit, your local authority may treat that as an application for council tax reduction. If you don't get housing benefit it's important to apply for council tax reduction separately. 

Apply as soon as you think you're eligible.  The reduction usually begins on the date you apply. You can ask for it to be backdated for up to six months. You should explain why you couldn't apply earlier than you did. If the local authority agrees you've got good reasons for applying late, it should backdate entitlement.  If you're over pension credit age, you can ask for the reduction to begin up to three months before the date of your application. You don't need to give any reasons for backdating if you're over pension credit age.

How you're paid

The local authority sends you a new bill showing the reduced amount of council tax you have to pay.

If you disagree with the decision

You can ask the local authority to review its decision. Write to the local authority within two months of the date of the decision about your council tax reduction.  If you're not happy after the review, you have 42 days to apply to the Council Tax Reduction Review Panel