Council tax is a significant household expense, but if you’re on a low income, you may qualify for a Council Tax Reduction (CTR) that could cut your bill by up to 100%. Many eligible households never apply because they assume they won’t qualify or don’t know the scheme exists. This guide explains how CTR works, who can claim, and how to apply through your local council.
What Is Council Tax Reduction?
Council Tax Reduction is a means-tested discount on your council tax bill. It replaced Council Tax Benefit when the scheme was devolved to local authorities in England, Scotland, and Wales in April 2013.
Each local council in England and Wales runs its own CTR scheme, meaning the rules, income thresholds, and discount levels vary depending on where you live. Scotland has a nationally set scheme with more generous provisions.
Because every council sets its own criteria, two households on identical incomes in neighbouring areas may receive different levels of reduction. This is why it’s essential to check the specific rules with your own council rather than relying on general guidance.
Who Is Eligible?
Eligibility for CTR depends on your income, savings, household composition, and which council area you live in. The main factors are:
Income and Savings Thresholds
| Savings Level | Typical Reduction |
|---|---|
| Under £16,000 | Full reduction (up to 100%) |
| £16,000 – £32,000 | Partial reduction |
| Over £32,000 | No reduction |
These thresholds apply to working-age applicants. Pension-age applicants have different, more generous rules — savings of up to £16,000 are fully disregarded, and the scheme is generally more favourable.
Who Can Claim?
You can usually claim CTR if you:
- Are responsible for paying council tax on your property
- Have a low income or receive qualifying benefits
- Have savings below £32,000 (working age) or meet the pension-age criteria
- Live in the property as your main home
You cannot claim CTR if you have more than £32,000 in savings (working age) or if your income is above the threshold set by your council.
Household Composition
Your household composition affects how much you receive. Councils consider:
- Whether you live alone or with others
- Whether any adults in the household are students
- The number of bedrooms you have (some councils apply a size criteria or “bedroom tax” equivalent)
- Whether any non-dependants live with you (adult children, for example)
How Much Can You Receive?
The amount of reduction depends on several factors:
- Your net income after allowable deductions
- Your savings and capital
- Who lives in your household
- Your council’s specific scheme rules
Working Age vs Pension Age
Working-age applicants can receive up to a 100% reduction under some councils’ schemes. However, many councils apply a taper: you lose a percentage of your reduction for every pound of income above a certain level. Some councils use a “minimum payment” rule, meaning you must always pay a small amount regardless of your income.
Pension-age applicants are assessed under a more generous framework. The national pension-age CTR scheme in England and Wales disregards more income and savings, and more households qualify for a full reduction. Scotland’s scheme is similarly generous for pensioners.
If you or your partner have reached state pension age and are on a low income, it’s well worth checking your entitlement — even if you’ve been told you don’t qualify.
How to Apply
Applying for CTR is straightforward. You need to contact your local council, either:
- Online: Most councils have an online application form on their website. Search for “[your council name] council tax reduction.”
- By phone: Call your council’s council tax department.
- In person: Visit your local council office if you prefer face-to-face support.
What You’ll Need
Have the following information ready before you apply:
- Your council tax account number (found on your bill)
- Details of your income, including wages, pensions, and benefits
- Details of your savings and investments
- Your housing costs (rent amount or mortgage interest)
- Information about everyone living in your household
- National Insurance number
Processing times vary by council, but most decisions are made within four to six weeks. If your application is approved, the reduction is usually applied automatically to future bills. Backdating may be available in some circumstances.
Second Adult Rebate
If another adult lives with you but isn’t your partner, child under 18, or joint tenant, you may be eligible for a Second Adult Rebate. This provides up to a 25% discount on your council tax bill.
The rebate is based on the second adult’s income, not yours. So even if you’re not on a low income yourself, if the other adult in your household is, you could still qualify.
To claim, contact your council and provide details of the second adult’s income and circumstances. The rebate cannot be claimed in addition to a full CTR award — if you already receive a 100% reduction, this won’t apply. However, if you receive a partial CTR, the council may be able to apply the Second Adult Rebate instead if it results in a larger discount.
Income Disregards
Certain types of income are not counted when your council calculates your CTR. These disregards can significantly increase your reduction. Common disregards include:
- Disability Living Allowance (DLA)
- Attendance Allowance
- Personal Independence Payment (PIP)
- War pensions and war widows’ benefits
- Industrial injuries benefits
- Child maintenance payments (in some cases)
- Charity payments made because of your disability
- Child Benefit (for working-age applicants)
- Universal Credit limited capability for work element
The list varies slightly between councils, so check with your local authority for the full list of disregards that apply to you.
Worked Example
Consider a single parent with one child, working part-time and earning £1,200 per month (£14,400 per year). Their annual council tax bill is £1,500.
After applying for CTR and accounting for their income, savings, and household composition, the council determines they qualify for a 75% reduction.
| Amount | |
|---|---|
| Annual council tax bill | £1,500 |
| CTR reduction (75%) | -£1,125 |
| Net council tax payable | £375 per year |
That’s a saving of £1,125 per year, or £93.75 per month. The application took around 15 minutes online, and the reduction was applied to the next quarter’s bill.
Tips for Claiming
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Apply even if you’re not sure you qualify. Councils run their own schemes with different thresholds. You won’t know until you check.
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Check every year. Your circumstances change — a pay rise, a child turning 18, a change in benefits. What you’re entitled to this year may differ from last year.
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Report changes promptly. If your income, household, or savings change, tell your council straight away. Overpayments will need to be repaid, and delays can cause bigger problems.
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Appeal if you’re refused. If your application is turned down and you believe the decision is wrong, you can request a mandatory reconsideration from the council. If that fails, you can appeal to the Valuation Tribunal.
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Get help with your application. Citizens Advice, welfare rights services, and local advice agencies can help you complete your application and ensure you’re claiming everything you’re entitled to.
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Don’t forget other discounts. CTR is separate from single-person discounts, student exemptions, and other council tax relief. You may be able to stack multiple discounts.
Useful Resources
- GOV.UK Council Tax Reduction — Find your council and apply
- Turn2Us Benefits Calculator — Check what benefits you’re entitled to
- Citizens Advice Council Tax — Free guidance on council tax issues
- Shelter Housing Advice — Help with council tax for renters