Council tax reduction scheme

How council tax reduction for working age applicants works from 1 April 2021

Step 1. Add together all of your and your partner’s investments and savings. If the total is more than £6,000 unfortunately you are not entitled to a reduction. You must pay in full your annual charge.

Step 2. Calculate your and your partner’s total weekly income. Do this by adding together all the monies that you and your partner have, shown in Table 1 below. Any money received on a non-weekly basis needs to be converted to weekly amounts. Do not include state benefits as these are disregarded.

  • If you are self-employed you will normally be treated as working a thirty-five-hour week, paid at the UK minimum hourly wage for those aged 25 plus, unless your earnings are higher than this, in which case your actual earnings will be used.
  • If both you and your partner are self-employed, or you are a lone parent, then the calculation is based upon a working week, of sixteen hours, paid at the UK minimum hourly wage for those 25 plus, for the lowest paid of the self-employed couple and for lone parents, unless their  earnings are higher than this, in which case your actual earnings will be used.

Step 3. Having added together all your income from the above list, subtract the following amount from the total:

  • If you are a member of a couple or a single parent and not in receipt of Universal Credit - £30. There is no disregard for Universal Credit cases as the earning disregard would have already been applied by DWP
  • If you are a student eligible for council tax reduction - £10 per week from student loans
  • If you have sub tenants living in the property - £20 from income you receive from them
  • If you have a boarder - the first £20 of income you receive from each boarder and half of the remainder received.

Step 4. Compare your calculated total weekly income to the income bands listed in Table 3 and find the income band your income falls into. Your entitlement to council tax reduction is calculated as a percentage of your council tax bill. If you fall into one of the ‘Protected’ categories, please use income bands in the Protected Column, otherwise use the Non-protected column.                                                                       

Table 3

Council Tax Reduction Calculation Table  

 

Protected groups

Non-protected

Band

Income bands

£

 

Council tax reduction award

Income bands

 

Council tax reduction award

1

0.00 - 120.59

 

100%

0.00 - 120.59

 

75%

2

120.60 – 140.69

 

75%

120.60 – 140.69

 

60%

3

140.70 – 160.79

 

60%

140.70 – 160.79

 

50%

4

160.80 – 180.89

 

50%

160.80 – 180.89

 

40%

5

180.90 – 200.99

 

40%

180.90 – 200.99

 

30%

6

201.00 – 221.09

 

30%

201.00 – 221.09

 

20%

7

221.10 – 241.19

 

20%

221.10 – 241.19

 

10%

8

241.20 – 261.29

 

10%

241.20+

 

0%

9

261.30+

 

0%

     
There is an additional step to your calculation, if you have other adults living with you in the property.

Step 5. Non-dependant deductions.

A non–dependant is any adult other than your partner who lives with you at the property and is part of your household, for example your grown-up child or parent. Any adults living with you are expected to contribute to your council tax bill.

For every adult living in the property with you, one of the following amounts will need to be deducted from your weekly entitlement. The weekly financial contribution for each non-dependant member of your household will be:

  • £6.53 - if a non-dependant is a non-worker
  • £12.06 - if they have gross weekly earnings of less than £183.92
  • £18.09 - if they have gross weekly earnings of £183.92 or above.