Council Tax reduction

From 1 April 2025, we are making amendments to our Council Tax Reduction scheme which affect working age claimants. Therefore, these changes do not affect households who are treated as pension age claimants.

Modelling of claimants has shown that the majority of our claimants will be either better off or their award will stay the same. However, some claimants will unfortunately have a reduction in their entitlement. A transitional support scheme will be introduced for a minimum of two years to provide additional help to residents who may experience a reduction in their award due to the below changes.

Change to the capital limit for protected customers

Under Council Tax Reduction, if a claimant holds capital (e.g. money in a bank account, property other than where they live or shares) worth over a specific limit, they are not eligible to receive Council Tax Reduction. Prior to April 2025, this maximum capital limit was £16,000 for those falling into protected groups, and £6000 for those in non-protected groups.

From 1 April 2025, the capital limit for claimants is £,000. This means a protected claimant who received support under the scheme whilst holding capital above £6000, would no longer be eligible to receive a reduction in council tax until their capital reduced below £6000. This change will only affect claimants in protected groups.

Change to the banding restriction for Protected Customers

All households who pay Council Tax have their property allocated into a banding which sets the amount of Council Tax they need to pay. The band is based upon a historic value of your home, with homes of a lesser value paying less Council Tax, with Band A being the lowest Band. Under the Council Tax Reduction scheme, support is based upon your property’s Council Tax band, and you cannot receive more support than would be required to pay in Council Tax. Under the scheme, non-protected claimants can only receive support up to the level of Council Tax for a Band D property, even if their property is in a higher Band.

However, prior to April 2025, no banding restrictions were applicable for protected claimants, who could receive support equivalent to the council tax band of their property, even if their property is higher than Band D.

From 1 April 2025, the Band D banding restriction for non-protected groups is also applied to protected groups. This means a protected claimant who receives support for a property that is higher than a Band D, would now only receive support equivalent to a Band D property.

Changes to Non-Dependent deductions

A non-dependent is a person who lives with you who is not your partner or dependent child. Most commonly this will be a relative or friend who lives with you, or a child of yours who is an adult over 18. Prior to 1 April 2025, a standard deduction of £5 would be applied for each non-dependent unless they were receiving specific benefits.

From 1 April 2025, a non-dependent who is out of work, working less than 16 hours or earning less than a specific amount per week will result in a £5 deduction. Where a non-dependent is working over 16 hours or has weekly earnings over £266, a £10 deduction will apply

Change to minimum entitlement threshold

When assessing a Council Tax Reduction claim, eligible claimants receive a weekly entitlement which is applied to their Council Tax account for the full financial year. For example, previously if a claimant is assessed as eligible for £1.50 per week, this is then divided by seven for a daily rate and multiplied by the number of days in the year with the total deducted from the amount due in their Council Tax account.

From 1 April 2025, a minimum award level has been put in place of £2 per week. This means, any claimants whose assessed entitlement is lower than £2 per week, will receive no entitlement. For example, a claimant previously receiving £1.50 per week, would now receive £0 per week deducted from their Council Tax from 1 April 2025.

Change to earnings disregards

When assessing eligibility for Council Tax Reduction, your income is considered against the minimum amount that a person in your circumstances is expected to live on. To allow you to keep more of any earnings over and above this minimum, a disregard reduces the earnings used. Prior to April 2025, the amount disregarded varied based on your household circumstances and ranged between £5 to £52.10 per week.

From 1 April 2025, the varying disregards are replaced by a single flat rate disregard of £30 per week which is applied to all claimants in work regardless of their circumstances

Changes to backdating of applications

Prior to April 2025, an application for Council Tax Reduction could only be considered based on the date the application was received, and could not be backdated under any circumstances.

From April 2025, applicant’s can now request for their entitlement to start three months before their application date if they are able to show good cause why they could not apply earlier.

Changes to application process for Universal Credit customers

Prior to April 2025, all customers were required to make a full application for Council Tax Reduction to be considered. However, from April 2025, when we receive your Universal Credit details directly from the Department for Work and Pensions, you will be automatically considered for Council Tax Reduction if you are liable for Council Tax at your address.

Changes to processing for changes in circumstances

From April 2025, a minimum change in your income of £50 gross per week must occur for your entitlement to be amended. Therefore, if you have a change that increases or decreases your income by £20, your entitlement will not be adjusted. However, please note you must still inform us of all changes in your circumstances so it can be determined whether this minimum change threshold has been met.