Council tax reduction has replaced the council tax benefit, and is used to help you pay your council tax bill.
How much you will save will depend on your own situation… We take a look in more detail at this new system with our easy-to-follow guide.
What is a council tax reduction?
Council tax reduction schemes are run by your local council and provide a discounted council tax bill to people who are either unemployed or are on low incomes that can’t afford to pay.
Can I claim council tax reduction?
You can claim a council tax reduction if you pay council tax but you’re on a low income or no income at all and have savings below £16,000.
You can apply whether you rent or own your home, but you must actually live there and it must be your only or main place of residence. If you live in two neighbouring houses and you pay council tax on both of them, you may be entitled to a council tax reduction on both properties too.
You also have to be liable for the council tax in your home in order to apply for a reduction, whether on your own or jointly responsible with someone else.
The reduction and how it’s judged is different depending on where you live, so check with your local authority to see what you’re entitled to.
You eligibility could depend on:
- Where you live
- Your income (including savings, pensions and partner’s income)
- Whether you have children that live with you
- Whether other adults live with you
How much council tax reduction will I get?
The biggest reduction you can get is 100% off your annual bill.
To work out your reduction amount, your council will look at how much money you (and your partner if you have one) have coming in, including earnings, benefits and tax credits. They look at lots of things when judging your case, including your age, family size, disabilities and whether anyone living with you can afford to help you.
Depending on your circumstances, you may get more of a reduction to your bill (e.g. if you receive disability benefit, if you receive a carer’s benefit, if you live with a full-time student as they don’t have to pay council tax).
If you live alone, you are entitled to a 25% discount on your bill, not matter what your financial circumstances.
I’m a pensioner, can I receive council tax reduction?
Again, it depends on your circumstances. Your local council will make their decision based on whether you get pension credit, and if you do, how much of it you get. However, if you have a non-dependant adult living in your property, the amount you receive may be reduced, regardless of your circumstances.
If you or your partner receives the guarantee part of pension credit, the local council will ignore any income you receive and you may be entitled to a full council tax reduction.
If you only receive the savings part of pension credit, your reduction will be based on your income and capital. If they find this comes to over £16,000 you won’t be eligible for council tax reduction.
If you don’t receive pension credit at all, although you won’t be entitled to a full reduction, you may still be eligible for some, so it’s worth getting in touch with your local council to find out.
How do I apply for council tax reduction?
You need to contact your local council and ask them for a form. You can find out their information by looking at your council tax bill.
Depending on where you live, you may be able to apply online or over the phone. When you apply, make sure you have your National Insurance details to hand as you’ll need to provide this.
Once your local council has received all your information, they’ll make a decision within a fortnight and you’ll be informed of it by post. If the council accepts your claim, you can ask for it to be backdated from when you first contacted them to apply for the council tax reduction. In order for them to backdate your claim you need to make sure you send the completed form within a month of telling the council you want to apply for it.
How is council tax reduction paid?
Council tax reduction isn’t paid to you directly, instead it’s automatically removed from your council tax bill.
What if I’m not eligible for council tax reduction?
If your claim isn’t approved, there are other ways to reduce your council tax bill. For example, if you’re on a low income, you can try and claim for a second adult rebate.
If you don’t agree with your local council’s decision, whether your claim gets rejected or you don’t think you’ve got enough of a discount, you can appeal against it. You do this by writing to your local council and explaining why you disagree, they then have 2 months to reconsider their decision based on the arguments you put forward in your letter.
If the council don’t reconsider or doesn’t respond to your letter, you can appeal to the Valuation Tribunal.
For more information on council tax reduction, visit the official GOV website.