Council Tax Support changes 2020/2021

Council Tax Support is changing from 1 April 2020

Council Tax Support provides low income households, both in and out of work, with help to pay their council tax. Any owner-occupier or tenant aged 18 or over who is legally responsible for the council tax can make a claim for Council Tax Support.

The level of Council Tax Support is based on the income and circumstances of the household.

The Government has set the rules we must use to calculate Council Tax Support for applicants who have reached state pension age. Changes to the scheme from 1 April 2020 do not affect Pension Age applicants unless they have a partner who is receiving a working age means tested benefit or Universal Credit.

Working Age applicants

Following a ten week public consultation in 2019 and, having considered the responses and assessed the impact of the proposed changes, we have approved a new local income banded scheme to replace the ‘means tested’ approach for working age people. These changes will make the scheme easier to understand and reduce the number of adjustments to Council Tax Support awards that result from monthly changes in payments for customers who receive Universal Credit. 

There is no change to the maximum level of support and working age applicants will still need to pay at least 20% of their Council Tax charge.

Under the new scheme we will look at the circumstances of the household to determine which household group applies. We then calculate the total income of the applicant and any partner, some income will be ignored such as Child Benefit or Personal Independence Payments (PIP). The amount of support towards their Council Tax that applicants will be entitled to is based on the household group that applies and the calculated household income as shown below.    

 

£0 to £82 weekly income: Band 1 - 80% reduction

£82.01 to £133 weekly income: Band 2 - 60% reduction

£133.01 to £184 weekly income: Band 3 - 40% reduction

£184.01 to £265 weekly income: Band 4 - 20% reduction

Over £265 weekly income: Band 5 - 0% reduction

£0 to £122 weekly income: Band 1 - 80% reduction

£122.01 to £173 weekly income: Band 2 - 60% reduction

£173.01 to £224 weekly income: Band 3 - 40% reduction

£224.01 to £306 weekly income: Band 4 - 20% reduction

Over £306 weekly income: Band 5 - 0% reduction

£0 to £255 weekly income: Band 1 - 80% reduction

£255.01 to £306 weekly income: Band 2 - 60% reduction

£306.01 to £407 weekly income: Band 3 - 40% reduction

£407.01 to £560 weekly income: Band 4 - 20% reduction

Over £560 weekly income: Band 5 - 0% reduction

£0 to £203 weekly income: Band 1 - 80% reduction

£203.01 to £255 weekly income: Band 2 - 60% reduction

£255.01 to £356 weekly income: Band 3 - 40% reduction

£356.01 to £458 weekly income: Band 4 - 20% reduction

Over £458 weekly income: Band 5 - 0% reduction

£0 to £255 weekly income: Band 1 - 80% reduction

£255.01 to £306 weekly income: Band 2 - 60% reduction

£306.01 to £407 weekly income: Band 3 - 40% reduction

£407.01 to £560 weekly income: Band 4 - 20% reduction

Over £560 weekly income: Band 5 - 0% reduction

£0 to £508 weekly income: Band 1 - 80% reduction

Over £508 weekly income: Band 5 - 0% reduction

  • Changes in the household income may not result in a change to the amount of Council Tax Support discount awarded if the new income is still within the same income band.
  • Changes in the household composition, even if there is no change to household income, may result in a change to the amount of Council Tax Support discount awarded if the change moves the household into a different group.

Key Features of the new scheme

  • Anyone with savings or capital in excess of £6,000 will not qualify for Council Tax Support;

  • Council Tax Support is limited to a Band E charge, this means if you live in a Band F, G or H property, the maximum support you can receive will be 80% of a Band E charge;

  • The way we calculate Council Tax Support will change for working age people. We will calculate the amount of household net income and applicants will receive a discount of either 80%, 60%, 40%, 20% or 0% depending which income band that net income falls into;

  • By net income we mean the total household income from both net earnings and unearned income and after we have deducted any incomes that are disregarded;

  • By net earnings we mean the amount of earnings after any deductions for tax, national insurance contributions and any amount towards a personal pension;

  • Applicants in receipt of a passporting benefit will automatically be placed into Band 1 and receive 80% discount.  By passporting benefit we mean Income Support, Job Seekers Allowance (Income Based) or Employment and Support Allowance (Income Related);

  • Where a deduction is made for a non-dependant living in the property this will be a standard £4 per week regardless of the income of the non-dependant;

  • To support incentives to work we will disregard an amount from any weekly net earnings.  This will be £5.00 for single people, £10.00 for couples, £20 for disabled & carers and £25 for households with at least one dependant child (the highest amount that applies will be disregarded);

  • Child care costs will continue to be disregarded from net earnings for those in employment or self-employment up to a maximum of £175 per week for one child and £300 per week for two or more children;

  • Extra amounts may be disregarded from income if someone in the family is disabled e.g. if a child receives Personal Independence Payments an extra £65.52 each week will be disregarded;

  • Income from Carer’s Allowance will be disregarded in full and will not be included in the calculation of income;

  • Income from Disability Living Allowance, Personal Independence Payments, Armed Forces Independence Payments, Child Benefit, Child Maintenance, War Disablement Benefits and War Widow/er Pension will continue to be disregarded in full as income;

  • Bereavement Support payments will be disregarded in full as income;

  • Up to 100% of any Universal Credit Housing Cost element will be disregarded as income;

  • Backdated awards of Council Tax Support will continue to be limited to 6 months and this will be at the discretion of the council;
     

 Council Tax Support Scheme 2020 to 2021 [PDF, 1.1MB]

 

Apply for Council Tax Support