Help with council tax

FACTSHEET No. 54

Help with Council Tax

This factsheet is a basic introduction to help with council tax.

1. What is council tax?

Council tax is a charge made by your local authority to cover services which they provide for you. It applies to England, Scotland and Wales. The amount of council tax that you must pay varies from authority to authority but all assessments are based on the property band that applies to your home.

Each dwelling in Great Britain is given a valuation then placed on a valuation list in one of eight broad valuation bands, starting with the lowest, band A to the highest, band H (A to I in Wales). The band that applies to your dwelling will be written on your council tax bill.

There is no council tax in Northern Ireland, which still has a rating system. You can find out more about this from the Northern Ireland Housing Executive website at www.nihe.gov.uk/housing_benefit/ and the Land and Property Services website at www.lpsni.gov.uk/.

2. Help with council tax bills

If you are liable to pay council tax you may be able to reduce the amount that you have to pay by claiming council tax benefit, a discount, a reduction for disability or an exemption.

2.1 Council tax benefit

You can get two types of benefit.

Main council tax benefit - You can get this if you are on a low income but your benefit tapers off instead of stopping altogether when your income goes above income support levels.

Second adult rebate - This is also known as alternative maximum council tax benefit. It is paid if you have someone living with you, other than your partner, whose income is low (e.g. if he or she is on income support or in a low paid job). This benefit is assessed on their income not yours - even though it is actually paid to you.

You also have to pass the habitual residence test and have a right to reside to get either of these benefits.

Your main council tax benefit may be affected if you have any other adults living with you apart from your partner.

Note: The Welfare Reform Act 2009, which received Royal Assent on 12 November 2009, introduced an order making power to rename council tax benefit (CTB) as council tax rebate but, as yet, there is no timeframe for this.

2.1.1 The habitual residence test and the right to reside

The term "right to reside" is not defined but is dependent on your immigration status and nationality. You might have a right to reside under United Kingdom rules, EC law or because you are a British citizen.

The habitual residence test is a test to see if you normally live in the United Kingdom, the Channel Islands, the Republic of Ireland or the Isle of Man). The test will be applied if you have been living abroad.

There is no legal definition of 'habitual residence'. Relevant factors are where you normally live, where you expect to live in future, your reasons for coming to this country, the length of time spent abroad before you came here, and any ties you still have with the country where you have come from.

However, the test should not be applied if someone:

is an EC national with 'worker status', or the 'right to reside' (under EC worker legislation); or

has refugee status; or

has exceptional leave to remain or enter.

If these do not apply, a Decision Maker (DM) will decide whether you are habitually resident or not. Get advice if you fail this test.

2.1.2 How do I claim council tax benefit?

You can claim both types of council tax benefit at the same time as you claim income support, income-related employment support allowance or income-based jobseeker's allowance.

If you are not claiming these benefits you can claim by phoning your local authority.

You can also claim from your local authority using their claim form.

2.1.3 How much is main council tax benefit?

The amount you get will vary depending on your circumstances. Council tax benefit assessments are divided into two parts.

personal allowances - these payments vary, depending on whether you are single, a lone parent or a member of a couple.

premiums - are paid if you or your partner have a disability, provide care or have reached the qualifying age for pension credit.

You can view the current benefit rates on our website at www.disabilityalliance.org/benrate.htm. There is also detailed information on benefits rates in the Disability Rights Handbook.

Non-dependant deductions

Your main council tax benefit will be affected if you have a non-dependant living with you.

A non-dependant is someone who is over 18 who is not your partner or a:

joint owner-occupier

a tenant

boarder

lodger

sub-tenant

paid carer provided by a charity or voluntary organisation

Any adult son or daughter is considered to be a non-dependant.

Non-dependant deductions are not made if you or your partner is registered blind or receives the DLA care component or Attendance Allowance.

Personal allowances

These are paid to you for the people in your household. The amounts paid depend on your age, whether you are single, a lone parent, part of a couple (whether married or living together or a civil partner) or have children. There are also special rates if you are entitled to main phase employment and support allowance.

Your household includes your partner and any dependent child or qualifying young person living with you.

A dependent child is a child under age 16. A qualifying young person is some one who is under 20 and either in full-time non-advanced education or approved training which began before he or she was 19.

You will also get an additional allowance if you are claiming employment and support allowance (see Factsheet F27 - employment and support allowance).

Premiums

You can get extra amounts in the form of premiums if you satisfy certain conditions.

You can get any or all of the following premiums if you satisfy the rules for them:

carer premium
disabled child premium
enhanced disability premium
family premium
severe disability premium

In addition to these premiums you can get one of the premiums listed below. If you qualify for two of the premiums on this list you will get the one which pays you the most. The list starts from the lowest paying to the highest:

family premium lone parent rate
disability premium

Carer premium

You or you partner must be entitled to carer's allowance, even if you are not actually paid it because you receive another benefit. This premium is payable for each person who qualifies.

Disability premium

You must be under the qualifying age for pension credit and one of the following applies to you or your partner:

are registered as blind, or taken off that register in the past 28 weeks

are getting one of the following qualifying benefits - attendance allowance, disability living allowance (DLA), long-term incapacity benefit (IB), severe disablement allowance (SDA), the disability element or severe disability element of working tax credit, war pensioner's mobility supplement, constant attendance allowance

you are the claimant and you have been incapable of work or entitled to statutory sick pay during the qualifying period of 52 weeks (or 28 weeks if you are terminally ill) and still be incapable of work.

If you have a partner you will be paid a higher couple rate of this premium.

You cannot get this premium if you are getting employment and support allowance or have a limited capability for work.

Disabled child premium

You must have a dependent child or qualifying young person under age 20 who is getting disability living allowance or who is registered blind. The premium is paid for each child who qualifies.

Enhanced disability premium

You or your partner must satisfy one of the following:

be in the employment and support allowance support group

be under the qualifying age for pension credit and receiving the high rate care component of disability living allowance

If you have a partner you will be paid a higher couple rate of this premium.

Family premium

You must have a dependent child or qualifying young person under age 20. If you have a child under the age of one you will get an additional amount.

Family premium lone parent rate

This premium is paid instead of ordinary family premium. You can get it if you claimed council tax benefit before 6.4.98.

Severe disability premium

You or your partner must satisfy all of the following:

be receiving the care component of disability living allowance (middle or higher rate) or attendance allowance

live alone (there are exceptions to this rule)

no one else must be getting carer's allowance for looking after you

There is a couple rate if both of you qualify.

2.1.4 Capital

You cannot get council tax benefit (CTB) if your capital or savings (or you and your partner's capital or savings) is above £16,000. Your CTB will be affected if your capital or savings (or you and your partner's capital or savings) is above £6,000.

The lower limit is set at £10,000, if you or your partner are over the qualifying age for pension credit (and not claiming income-related employment and support allowance, income support or income-based jobseeker's allowance).

There is no upper savings limit if you are getting pension credit guarantee credit and claiming council tax benefit.

Tariff income

If your capital is between the lower and upper limits, a ‘tariff income’ is assumed. One pound a week for every £250 (or part of £250) above the lower limit is included as your income.

For example, if you have capital of between £6,250.01 and £6,500, £2 a week is included as your income. Each time capital gets into the next block of £250 (even by as little as one penny) an additional £1 is included as income.

If you or your partner are the qualifying age for pension credit or over and you are getting council tax benefit and not claiming income-related employment and support allowance, income support or income-based jobseeker's allowance your assumed tariff income is one pound a week for every £500 (or part of £500) above the lower limit.

2.1.5 Disregarded earnings

Some of your earnings are not taken into account when working out main council benefit. This is normally £5 if you are single or £10 if you have a partner. You will have £20 of your earnings disregarded if you qualify for the disability premium or the carer premium. You will have £25 of your earnings disregarded if you are a lone parent.

2.1.6 Other benefits

Some benefits are not taken into account when working out means tested benefits. These include attendance allowance, child benefit and disability living allowance.

2.1.7 Finding work

Your council tax benefit can continue at your old rate for four weeks if you find work and you were getting :

employment and support allowance (ESA)

incapacity benefit (IB)

income support (IS)

income-based jobseeker's allowance (JSA)

severe disablement allowance (SDA)

To get council tax benefit extended payments you must have been on one of the above benefits for at least 26 weeks and your job must be expected to last at least 5 weeks. You do not need to make a claim to receive extended payments.

2.1.8 How much is second adult rebate?

If the second adult:

is getting income support, income-related employment support allowance, income-based jobseeker's allowance or pension credit - your council tax bill is cut by 25%.

has gross earnings of under £177 a week (gross) - your council tax bill is cut by 15%.

has gross earnings of £177 to 230.99 a week - your council tax bill is cut by 7½%.

has gross earnings of £231 a week or more - there is no cut to your council tax bill.

If you are a student and the second adult:

is getting income support, income-related employment support allowance, income-based jobseeker's allowance or pension credit - your council tax bill is cut by 100%.

2.2 Council tax discounts

A normal council tax bill assumes two occupiers. 50% of any charge is for the property itself and 50% is for these two occupiers.

You can get a discount of 25% off your bill if you are the only person living in your home or if all the other occupiers are disregarded for council tax purposes. You can get a 50% discount off your bill if you and all the other occupiers are disregarded for council tax purposes.

Those who are disregarded include:

people who are ‘severely mentally impaired’ (see council tax exemptions below for what this means).

some carers.

people in a hospital, a care home, or certain kinds of hostel.

anyone whose ‘sole or main residence’ is elsewhere.

young people, students, student nurses, youth trainees, apprentices, and others.

2.2.1 Second homes

In England and Scotland, local authorities have the power to reduce the discount offered on furnished second homes from 50% to just 10%. In Wales, authorities have discretion to reduce the discount below 50% or to offer no discount at all.

Local authorities also have the power to reduce or remove completely the discount offered on long-term empty properties that are substantially unfurnished.

2.2.2 How do I claim council tax discount?

Contact your local authority.

If your application for a discount is refused you can appeal to your local authority. There is no time limit for making this appeal.

If this is refused you have a further right of appeal to a Valuation Tribunal in England or Wales or a Valuation Appeal Committee in Scotland. This must be done within two months of receiving the decision.

2.3 Council tax reduction for disability

You can get a reduction on your bill if you or someone in the home is substantially and permanently disabled and one of the following applies:

he or she has a room which is used to meet their special needs e.g. for the purposes of dialysis, treatment or for the storage of equipment.

he or she has a second bathroom or kitchen used to meet their special needs

he or she needs to use a wheelchair to get around the house.

If any of these apply, the bill for your dwelling is reduced to the next lowest band. If you are already in a Band A property, and get a disability reduction, you will have your bill reduced by one sixth.

Disability reductions are available in all types of dwellings, including care homes and hostels.

In Scotland, the council water charge can also be reduced under this scheme.

There is no time limit for backdating this reduction.

There have been a number of recent court decisions affecting the disability reduction scheme. You can view summaries of these and the full decisions on our case law page at www.disabilityalliance.org/caselaw.htm.

If your application for a discount is refused you can appeal to your local authority. There is no time limit for making this appeal.

2.3.1 How do I claim council tax reduction for disability?

Contact your local authority.

2.4 Council tax exemptions

Your property may be exempt from council tax charges altogether. Exemptions include if you (and everyone else living with you) are severely mentally impaired and no one else in the property is liable to pay council tax.

Severely mentally impaired means you have a 'severe impairment of intelligence and social functioning (however caused) which appears to be permanent’; and have a certificate from a registered medical practitioner confirming this. You must also be entitled to one of the following:

disability living allowance (DLA) middle or highest rate care component.

attendance allowance (AA), constant attendance allowance (paid as part of industrial injuries benefits or war pensions) or an equivalent benefit.

employment and support allowance.

incapacity benefit.

severe disablement allowance.

income support which includes a disability premium (or your partner has a disability premium for them included in their income-based jobseeker’s allowance).

you are over state pension age and would have been entitled to one of the above benefits if you were under state pension age.

For a full list of exemptions see the Disability Rights Handbook.

3. Students and council tax

If you are a full time student you do not normally have to pay council tax. If you have a non-student partner, although you are not liable to pay council tax, your partner is. He or she may be able to get council tax benefit for both of you or a discount.

If you live in a property which is wholly occupied by students (including students temporarily absent from their course) the property is exempt from council tax. You also do not have to pay council tax if you live in a student hall of residence.

If you share a property with non-students the non-students will be liable to pay council tax but you will not. For those non-students who do have to pay you are disregarded for council tax discount purposes (see the section on council tax discounts above).

The only situation where you might be liable to pay council tax as a student is if you live with non students and you are "higher in the hierarchy of liability" than they are, for example if you are the owner of the property or the only person named on a tenancy agreement.

If this is the case you may still be able to get help in the form of a discount or main council tax benefit or second adult rebate.

4. Where can I get more help or information?

You can get help with council tax bills at your local advice centre, such as CARA or any citizen's advice bureau. You can get more information about this from Factsheet F16 - finding a local advice centre.

You can find out more information about council tax benefits, discounts appeals process, our factsheets and publications, you can contact CARA on +44 (0) 844 478 0015 -Mob: +44(0) 795 695 2645 -Fax: +44(0) 872 115 8436 -Email: info@cara-online.org.

Updated 8 April 2011