Council Tax Reduction: How to Reduce Your Council Tax Bill
Council Tax Reduction (CTR), also called Council Tax Support, is a means-tested benefit that cuts your council tax bill if you are on a low income. Because each local council runs its own scheme, what you can get depends on where you live. This guide explains how CTR works, how to apply, and what to do if your claim is refused.
- ✓Means-tested reduction run by your local council, apply to them, not DWP
- ✓Pension age on Pension Credit: up to 100% reduction in most areas
- ✓Working age: councils set their own rules, some give 100%, others cap at 80%
- ✓Universal Credit, Pension Credit, income-related ESA or JSA likely to qualify
- ✓Challenge a refusal via internal review, then the free Valuation Tribunal
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What is Council Tax Reduction?
Council Tax Reduction (also called Council Tax Support or Local Council Tax Support) reduces your council tax bill if you are on a low income. Key facts:
- ✓Administered by your local council, each council has its own CTR scheme
- ✓Means-tested: your income, savings, and household composition affect how much you can get
- ✓For people of pension age: the rules are broadly uniform across England (equivalent to the old Council Tax Benefit, up to 100% reduction)
- ✓For working-age people: councils set their own rules, so reductions vary widely, some councils give up to 100%, others cap at 80%
- ✓You apply to your local council, not DWP
- ✓CTR is not counted as income for other benefits
- ✓If you are on Universal Credit, Pension Credit, income-related ESA, or income-based JSA, you are likely to qualify for a significant reduction
Who qualifies for Council Tax Reduction?
Eligibility depends on your council's local scheme, but generally you may qualify if:
- ✓You are the person liable to pay council tax for the property
- ✓Your income is below a threshold set by your council
- ✓Your savings are below a set limit, usually around £6,000 to £16,000 (varies by council and whether you are pension age)
- ✓You are not a full-time student (though there are exceptions, single parents, students with disabilities, certain other cases)
- ✓You live in the property as your main home
Fast-track qualifying groups (likely to receive significant reductions):
- ✓People on Universal Credit (working-age): most councils apply a CTR scheme based on UC award
- ✓People on Pension Credit: entitled to maximum CTR (up to 100% in most areas)
- ✓People on income-related ESA or income-based JSA (existing claimants): entitled to maximum CTR
- ✓People on a low income with no savings: likely to qualify for a substantial reduction
- ✓Single adults: entitled to a 25% single person discount on top of any CTR
How income and savings affect CTR
Your CTR award is calculated based on your income and savings:
| Factor | Working-age | Pension age |
|---|---|---|
| Maximum reduction possible | Depends on council scheme, up to 100% in some areas | Up to 100% for those on Pension Credit |
| Savings limit (upper) | Usually £6,000 to £16,000 (check your council) | £16,000 (above this you get nothing) |
| Savings limit (lower) | Under £6,000 usually ignored (varies) | Under £10,000 usually ignored |
| Treatment of earned income | Reduces the award, usually by a set taper rate | Reduces the award gradually |
| Treatment of benefits income | Usually taken into account (except disability benefits) | Pension Credit treated as passporting benefit |
| Partner's income | Included in the assessment | Included in the assessment |
How to apply for Council Tax Reduction
Challenging a CTR decision
If your CTR claim is refused or you receive less than you expected, you can challenge the decision:
- ✓Step 1, Request an explanation: ask the council to explain how the decision was reached and what evidence was used
- ✓Step 2, Informal review: many councils offer an informal reconsideration before a formal appeal
- ✓Step 3, Formal appeal: request a formal review within the council's stated deadline (usually 1 month from the decision letter)
- ✓Step 4, Valuation Tribunal: if the council's internal review is unsuccessful, you can appeal to the independent Valuation Tribunal (for England) or equivalent in Wales/Scotland
- ✓The Valuation Tribunal is free to use and independent of the council
- ✓If you believe the council administered the scheme unlawfully, you can also complain to the Local Government and Social Care Ombudsman
CTR and other discounts, combining reductions
Council Tax Reduction can be combined with other discounts:
- ✓Single person discount (25%): if you live alone, you get 25% off before CTR is applied
- ✓Carer discount: a full-time carer living with the person they care for is disregarded, may generate a 25% or 50% discount
- ✓Severe mental impairment (SMI) exemption: someone with a severe mental disability is not counted as a resident, may reduce the bill
- ✓Student discount: full-time students are disregarded, a property of only students may be exempt entirely
- ✓Empty property discounts: some councils offer discounts for properties that are empty, unoccupied, or undergoing major repair
- ✓Second adult rebate: if someone else in your home is on a low income and not your partner, a second adult rebate may apply in some council schemes
Hardship funds and council tax write-off
- ✓Many councils have a discretionary hardship fund, they can reduce or write off council tax bills in exceptional circumstances
- ✓This is separate from CTR, it is a discretion the council can exercise where even the CTR scheme would leave someone in severe hardship
- ✓If you are in genuine financial crisis, write to the council's benefits section and ask whether a hardship payment is available
- ✓If you have a council tax debt you genuinely cannot pay, bankruptcy or a Debt Relief Order may be a way to clear it, council tax is an unsecured debt included in both
- ✓Councils also sometimes write off old council tax debts beyond the 6-year enforcement period, or when a debtor is clearly judgment-proof
Get instant help right now
A Citizens Advice appointment can take weeks. Our free assistant is available 24/7 with no appointment, giving you clear, step-by-step answers about your exact situation, what to do next, and the deadlines that matter.
Need to take action? It can draft a ready-to-send formal letter for you (optional, from £4.99).
England, Scotland, Wales & Northern Ireland.
Frequently asked questions
What is Council Tax Reduction?
Council Tax Reduction (CTR), also called Council Tax Support, is a means-tested benefit that reduces your council tax bill if you are on a low income. It is administered by your local council, which sets its own scheme, so the amount and rules vary by area. For pension-age claimants, up to 100% reduction is available. For working-age claimants, the maximum reduction depends on your council's scheme.
How do I apply for Council Tax Reduction?
Apply directly to your local council, each council has its own online application form on their website. You will need proof of identity, income details (payslips, benefits letters), bank statements, and savings information. Apply as soon as possible, CTR is usually only backdated to the date of application.
How much Council Tax Reduction can I get?
It depends on your council's scheme, your income, savings, and household composition. Pension-age claimants on Pension Credit can typically get up to 100% reduction. Working-age claimants vary significantly by council, some councils give up to 100% for people on Universal Credit or very low incomes, while others cap reductions at 80% regardless of income. Use your council's online benefits calculator to estimate your entitlement.
Does Universal Credit affect Council Tax Reduction?
Yes, if you are on Universal Credit, you are likely to qualify for Council Tax Reduction. You need to apply separately to your council, UC does not automatically trigger CTR. Many councils have simplified CTR schemes for UC claimants that make the calculation more straightforward. Tell your council you are on UC and they will factor this into your CTR assessment.
Can I challenge a Council Tax Reduction refusal?
Yes, you can appeal through the council's internal review process (usually within 1 month of the decision letter). If the internal review fails, you can appeal to the independent Valuation Tribunal, which is free and independent of the council. If you believe the council administered its own scheme unlawfully, you can also complain to the Local Government and Social Care Ombudsman.
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