Council Tax Reduction FAQs

Council Tax Reduction FAQs

Council Tax Benefit has changed and is now  Council Tax Reduction

1. What is Council Tax?

Council Tax is a local tax on domestic (non commercial) properties. It is set by the Council and is based on a property’s Council Tax band.

Each property is placed in one of 8 Council Tax bands (A – H), based on what the value of the property would have been on 1st April 1991.

The Council is responsible for collecting Council Tax, which contributes towards the funding of local public services.

2. Who has to pay Council Tax?

Council Tax is usually paid by the occupier(s) of a property. The full tax assumes that there are at least two adults living in the property. If there is only one occupant, they are eligible for a single person discount of 25%.

Council tax is also paid by the property owner where the property is unoccupied. Currently some unoccupied properties are exempt, which means you do not have to pay Council Tax for them.

Other exemptions may apply in certain circumstances e.g. where the property is a student hall of residence, or armed forces barracks.

3. Why has Council Tax Benefit changed to Council Tax Reduction?

From 1 April 2013 Council Tax Benefit was abolished and every Council had to replace it with a new Local Council Tax Reduction Scheme.

Central Government previously funded Council Tax Benefit in full but from April 2013, the Government has given local Councils around 10% less than previously for the expenditure on their new schemes. This grant will not go up, even if more people claim or the Council Tax charge increases.

As pensioners are not affected by the changes and made up around 57% of the caseload for Council Tax Benefit, in effect, the money available to support working age people has significantly reduced.

4. What has changed?

In brief, for working age customers the main changes under the new scheme are as follows:

  • Percentage Cut- Once all applicable discounts have been made from the customer’s Council Tax charge eg a single person discount, the amount of Council Tax Reduction they are entitled to will be calculated in a similar way as it was for Council Tax Benefit. From this a 22.7% cut will be deducted which will be added to their bill for them to pay.
  • There is no second adult rebate
  • There are no backdates allowed

In brief still included in the scheme are:

  • A 4 week run on will still be allowable for those on a qualifying benefit continuously for 6 months prior to finding work
  • War pensioner incomes will continue to be disregarded

5. Who do the changes affect?

The Government have recognised that low-income pensioners who receive support with Council Tax cannot be expected to increase their income through paid work. Pensioners are therefore protected from any reform or reduction in their entitlement. Localised schemes are solely for working age people.

All working age claimants are affected by these changes. Although pensioners have moved on to a National Council Tax Reduction Scheme, they are protected and will see no change to the amount of support they are receiving.

6. What is the definition of a pensioner?

For the purpose of the Council Tax Reduction Scheme, a pensioner is someone who has reached the qualifying age for state Pension Credit


they or their partner are in receipt of Income Support, Jobseekers Allowance Income Based, Employment Support Allowance Income Related in which case they will be treated as working age and will be assessed under the Local Council Tax reduction scheme.

7. Are other Council Tax discounts and exemptions affected by the new scheme?


8. Who will be able to get Council Tax Reduction?

Anyone who is liable to pay Council Tax can apply for Council Tax Reduction and will have their entitlement assessed. The Council will need income, capital and household details.

9. How much do I have to pay?

Once all applicable discounts have been made from your Council Tax charge ie a single person discount, the amount of Council Tax Reduction you are entitled to is calculated.

From this a 22.7% cut will be deducted which will then be added to your bill for you to pay.

You can pay this in monthly instalments.

10. Do I still need to tell you about any change in my circumstances?

Yes, it is important that you tell us about any change in your circumstances straight away so that we can ensure you are receiving the correct amount of Council Tax Reduction.