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What is council tax reduction

Council tax reduction is a reduction you can get on your council tax bill if you and your partner (or another adult who lives with you) have a low income. You have to apply to your local council to get it.

Who can get council tax reduction

To get council tax reduction you must:

  • be liable for council tax
  • either be getting a ’qualifying benefit’, or not have too much income or savings
  • have your normal home in Scotland and meet the other residence tests below.

Residence rules for council tax reduction

You can only get council tax reduction if:

Normally living in Scotland

You can only get council tax reduction if you ‘normally live’ in a home in Scotland, and are liable to pay council tax for it. To decide whether you normally live somewhere, the local authority considers any other homes you sometimes live in, whether they are in Scotland or not.

Once you get council tax reduction, it can continue during a ‘temporary absence’ from your home. If you go abroad, this can normally only last for a maximum of one month, unless your job means you have to work outside the UK.

If you are not abroad, you council tax reduction can sometimes continue for up to one year, depending on why you are away from home. Contact your local authority if you get council tax reduction and are going to be away from your home (other than for a short holiday), and explain the situation.

If your council tax reduction is stopped, get advice about whether this is correct. If it is not, you should challenge the decision within two months.

The habitual residence and right to reside tests

To get council tax reduction, you must be ‘habitually resident’ in the common travel area (which is the British Isles, including Ireland and the Channel Islands). This normally requires that you have lived in one of these countries for a period (but not a specific length of time), and have an intention to stay there for some time. However, if you used to live in the British Isles and are returning from abroad, it is possible to be habitually resident as soon as you are back, depending on your circumstances.

As part of the habitual residence test, the local authority considers whether you have a ‘right to reside’. If you are a British or Irish citizen you automatically have this right. If you are a national of an European Economic Area country, this may depend on how long you have been in the UK, and what you and your family have been doing since you moved here. 

Now that the UK has left the European Union, European nationals can be 'subject to immigration control' (see below).

Immigration law and council tax reduction

Most non British and Irish nationals may be ‘subject to immigration control’. This can include not being able to access types of financial support that count as ‘public funds’. Council tax reduction is included in the list of public funds.

Claiming council tax reduction if you or a member of your family is not allowed to get public funds can affect your right to stay in the UK or extend your visa. You should get expert immigration advice before you claim council tax reduction if you are unsure of your immigration status or that of someone in your family. You can find immigration advisers in your area using the Office of the Immigration Services Commissioner’s adviser finder.

How much is council tax reduction

Normally, you cannot get council tax reduction if you (and your partner) have savings over £16,000. This includes things like investments and the value of property you own but don’t live in. There are two exceptions:

  • if you get the guarantee credit part of pension credit, all of your savings are ignored;
  • if you live with an adult who is not your partner, you may be able to get a ‘second adult rebate’ if their income is low, even if you have savings over this amount. Read more about the second adult rebate.

To get council tax reduction (except second adult rebate) you must also have a low income. This includes the income of your partner if you have one, but not your children or anyone else who lives with you.

Unless you live with an adult other than your spouse or partner, the maximum amount of council tax reduction you can get is 100 per cent of your council tax bill. You will still have to pay some charges for water and sewage, even if you get the maximum council tax reduction.

If you live with another adult, your maximum council tax reduction may be reduced, or in some circumstances council tax reduction may be based on their income instead of yours. Read more about the rules if you live with another adult.

If you get a ‘passporting benefit’ you automatically get your maximum council tax reduction. The passporting benefits are:

  • income support
  • income-based jobseeker's allowance
  • income-related employment and support allowance
  • guarantee credit of pension credit.

If you do not get one of these benefits, the amount you get depends on what income you have. Your income is compared with an ‘applicable amount’, which depends on your circumstances, including who lives with you as part of your family (your partner and any children under 20 who are still at school). There are additional amounts if you or a member of your family is disabled or a carer. If your income is above this applicable amount, your maximum council tax reduction is reduced by 20 per cent of the excess income.

Your earnings are treated slightly differently if you get universal credit. The local authority will use information about your universal credit award to help it to work out your council tax reduction.

Other than earnings, only income specified in the regulations affects your council tax reduction. This includes most pensions, some benefits and tax credits, and some parts of your universal credit award if you get a child, childcare or transitional element.

The amount of council tax reduction varies based on your individual circumstances, so there is no set income above which you cannot get council tax reduction. If you live in a band E-H property, there is a separate form of council tax reduction that you can get even if your income is quite high. Read more about council tax reduction in Band E-H properties.

You can read more about how working age council tax reduction is calculated in a CPAG factsheet.

There are several online benefit calculators that you can use to check how much council tax reduction you may be entitled to. You can find a list of online benefit calculators on gov.uk.

If you need more help, you can get advice. Find details of local advice agencies on the Advicelocal website. 

If you are unhappy with the decision about the amount of your council tax reduction you may be able to challenge it. Read more about challenging council tax reduction decisions.

How to claim council tax reduction

Each local authority decides how you can claim council tax reduction. If you are also claiming other benefits, sometimes this is also treated as a claim for council tax reduction.

  • If you claim housing benefit to help with your rent using a form from your local authority, most local authorities use this form as a claim for council tax reduction as well.
  • If you apply for universal credit, some local authorities treat this as a claim for council tax reduction.

It is very important to contact your local authority and check that you have claimed, if you are unsure.

Find out how to contact your local authority on mygov.scot.

Sometimes your council tax reduction can be ‘backdated’ to before the date that you claimed it. Find out more about when your council tax reduction starts.

If you disagree with a decision about council tax reduction, you can request a review of it. There is a strict time limit to do so. Find out more about challenging council tax reduction decisions.

Once you get council tax reduction, the amount you get can change if your income or other circumstances change. Find out what to do if your circumstances change.

More information

In addition to council tax reduction, there may be other ways to reduce your council tax bill. If you might be eligible you should ask for a discount, even if you also get council tax reduction. Read more about other ways to reduce your council tax.

You can read more about how working age council tax reduction is calculated.

Read the working age council tax reduction regulations on legislation.gov.uk.

Read the pension age council tax reduction regulations on legislation.gov.uk.