Working age bands
The Council Tax Reduction (CTR) banding scheme changes for working age households from 1 April 2020 are as follows:
Based on weekly income
Family 1 child
Family 2 or more children
If the income level exceeds the upper limit, the entitlement will be 0.
Applicants who receive a war widow's pension, war disability pension or payments under the armed forces and reserve forces compensation scheme will have this income disregarded. All other income will be taken into account and a discount of 100% will be applied against their liability if the total is less than the upper income level.
Where an applicant, their partner or any children in the household are in receipt of:
- Disability Living Allowance
- Personal Independence Payments
- limited capability for work element or disabled child element of Universal Credit and where the net income (excluding the above income) is less than the upper level in Band 2
they will receive an award of 90% of their council tax liability.
An applicant, or their partner, in receipt of employment and support allowance with the support component, or registered blind and have a net income of less than the upper level in Band 2 will receive an award of a reduction of 90% of their council tax liability where the net income is less than the upper level in Band 2.
Bands 3 to 6
Applicants whose total net income is less than the levels in Band 3 will receive a reduction of 75% against their liability for council tax.
This will also apply to those applicants receiving income support, income related employment and support allowance and income-based jobseekers allowance or Universal Credit without earnings or unearned income (also known as passported customers). Where customers are not in receipt of those benefits and their income is above the levels specified in Band 3, CTR shall be awarded at the appropriate level (Band 4, 5 and 6).
Applicants who have a total net income above the levels shown in the grid for their household composition will receive no reduction.
Note: passported customers who fall in to Band 1 or Band 2 will not be subject to the upper income level and will simply receive either 100% or 90% of their Council Tax respectively.
Summary of other changes to the scheme
From April 2018 the number of dependants (children) included in a CTR assessment was limited to 2. However transitional protection was awarded if the applicant was in receipt of Council Tax Reduction or Child Tax Credit for more than 2 children prior to 31 March 2017.
The new banding scheme will continue this, which means these applicants will continue to receive an equivalent protection under the new CTR banding scheme. Customers will receive this protection until there is a break in their claim, the amount of dependants in their household reduces to 2 or less, or until they move to Universal Credit.
The capital limit is now £6,000, if you have more than £6,000 you will not be eligible for Council Tax Reduction (capital is calculated in accordance with the CTR scheme rules).
Where an applicant and their partner (if they have one) has other adults living with them such as adult sons, daughters, elderly relatives or another person over the age of 18, their CTR may be reduced. Any charge made is called a non-dependant deduction.
A single standard deduction of £5 per week for each non-dependant in the household, regardless of their income is applied.
However, where the applicant or their partner (if they have one) are receiving the Disability Living Allowance care component or the Personal Independence Daily Living Payment (or otherwise not subject to a deduction) they will be exempt from any non-dependant deduction being made from their Council Tax Reduction.
A minimum award
When any entitlement is calculated as less than £1 per week, no Council Tax Reduction will be awarded.
An earnings disregard
A standard single earnings disregard of £25 per week is applied to any applicant who is working. If their earnings are less than £25 per week then we will disregard the amount of earnings.
How we assess Universal Credit income
The housing cost element, childcare cost element, disabled child element, limited capability for work element and carer element are disregarded from the award of Universal Credit. Any deductions and advanced payments are added back to the Universal Credit income. A person in receipt of Universal Credit without earnings or any other income will automatically fall in band 3 (unless they meet the criteria for bands 1 or 2).
Disregarded income (income that is not included in the calculation)
Where an applicant (or their partner if they have one) receives Carer's Allowance for looking after a person who is ill or disabled, the Carer's Allowance payment they receive is disregarded in the assessment of their income.
The support component of Employment and Support Allowance is also disregarded in the assessment of income.
Removal of the extended payment provisions
An extended payment of 4 weeks Council Tax Reduction will no longer be awarded where applicants have been in receipt of prescribed benefits (such as Income Support, Jobseekers Allowance or Employment and Support Allowance) and move into work which ends or reduces their entitlement.
To calculate your Council Tax Reduction under the new scheme use our online benefits calculator.
Note: the online calculator is not able to determine whether any transitional protection should be applied.
Please note: from 1 April 2023 our Council Tax Reduction scheme is changing.
- the minimum award of £1.00 per week will be increased to £2.00 per week
- the flat rate non dependant deduction of £5.00 per week will be increased to £8.00 per week.