Save time, do it online: Pay Apply Report

Legal definition of the council tax reduction scheme

See our Council Tax Reduction Scheme 2017-2018 (PDF: 1.39Mb \ 182 pages)

A summary of the scheme is shown below.

There are six classes of person entitled to Council Tax Reduction under the Scheme, each with a number of qualifying criteria.

Class A - Pensioners whose income is less than the applicable amount

The main criteria for Class A are:

  • the applicant must be a pensioner, or a pensioner couple;

  • the applicant must not have capital above £16,000 (for couples the combined figure must not exceed £16,000); and

  • the applicant's income (or combined income for couples) for the period in question must be less than their applicable amount. The applicable amount is the Government's assessment of the amount the claimant needs to live on. It takes into account the number of people in the household and any additional requirements for disabilities

In the case of an applicant who is in receipt, or whose partner is in receipt of a guarantee credit, the whole of his capital and income is counted as zero.

If an applicant meets the criteria for Class A, they will qualify for 100% reduction in their Council Tax liability, although the reduction may be adjusted if there are non-dependants in the household.

Class B - Pensioners whose income is greater than the applicable amount

The main criteria for Class B are:

  • the applicant must be a pensioner, or a pensioner couple;

  • the applicant must not have capital above £16,000 (for couples the combined figure must not exceed £16,000); and

  • Council Tax liability is higher than 20% of the difference between income (as calculated for Class A) and the appropriate applicable amount

If an applicant meets the criteria for Class B, their Council Tax reduction will be less than 100%. For example:

Council Tax Band Description Class £
A Weekly Council Tax Liability   28.76
B Weekly Income   353.64
C Applicable Amount   258.83
D Excess Income B and C 94.81
E 20% of Excess Income   18.96
  Weekly Council Tax Reduction A to E 9.80

Class C - alternative maximum council tax reduction - pensioners

The main criteria for Class C are:

  • the applicant must be a pensioner and, if they have a partner, the same must be true for the partner (with some exceptions). The partner must also be disregarded for Council Tax purposes, for example, someone with a chronic mental health condition; and

  • there must be at least one second adult living with the applicant who is not a partner, does not pay rent and is on a prescribed low income or benefit

Class 3 replicates the current second adult rebate scheme and it is the income of the 'second adult' that determines what level of reduction is awarded. The reduction awarded can be 7.5%, 15%, 25%, or if all adults are in receipt of certain benefits, 100%.

Class D - persons who are not pensioners whose income is less than the applicable amount

The main criteria for Class D are:

  • the applicant must be under the qualifying age for state pension credit and if they have a partner the same must be true for the partner (with some exceptions);

  • the applicant must not have capital above £16,000 (for couples the combined figure must not exceed £16,000); and

  • the applicant's income (or combined income for couples) for the period in question must be less than their applicable amount. The applicable amount is the Government's assessment of the amount the claimant needs to live on. It takes into account the number of people in the household and any additional requirements for disabilities.

If an applicant meets the criteria for Class D, they will qualify for 100% reduction in their Council Tax liability, although the reduction may be adjusted if there are non-dependants in the household.

An applicant in receipt of income support, income-related Job Seeker's allowance, or income-related employment and support allowance will have both income and capital counted as zero.

Class E - persons who are not pensioners whose income is greater than the applicable amount

The main criteria for Class E are:

  • the applicant must be under the qualifying age for state pension credit and if they have a partner the same must be true for the partner (with some exceptions);

  • the applicant must not have capital above £16,000 (for couples the combined figure must not exceed £16,000); and

  • Council Tax liability is higher than 20% of the difference between income (as calculated for Class D) and the appropriate applicable amount.

If an applicant meets the criteria for Class E, their Council Tax reduction will be less than 100%. The example shown at Class B explains the calculation.

Class F - alternative maximum council tax reduction - persons who are not pensioners

The main criteria for Class F are:

  • the applicant must be under the qualifying age for state pension credit and if they have a partner the same must be true for the partner (with some exceptions). The partner must also be disregarded for Council Tax purposes, for example, someone with a chronic mental health condition; and

  • there must be at least one second adult living with the applicant who is not a partner, does not pay rent and is on a prescribed low income or benefit.

Class F replicates the current second adult rebate scheme and it is the income of the 'second adult' that determines what level of reduction is awarded. The reduction awarded can be 7.5%, 15%, 25%, or if all adults are in receipt of certain benefits, 100%.

Administration

Regulations will continue to prescribe the dates from which claims start, backdating provisions, dates from which prescribed change of circumstances take effect and notification of decisions.