The pension-age scheme

If you have reached State Pension age, your Council Tax Reduction is worked out under a national scheme that applies across England, Scotland and Wales. Your council cannot set a lower maximum for pension-age claimants, and it cannot impose a minimum payment of the kind some English working-age schemes require. The pension-age scheme is deliberately protective: people who have reached pension age are meant to keep the level of help they had under the old Council Tax Benefit system.

Guarantee credit: the route to a full reduction

The single most valuable fact on this page is this: if you receive the guarantee credit part of Pension Credit, you qualify for the maximum Council Tax Reduction in most schemes. That means up to 100% of your council tax charge, after any discounts, less any deduction for a non-dependant adult living with you. The guarantee credit route also overrides the capital limit — you can qualify even if your capital is above £16,000. You can receive a full reduction even if the weekly amount of guarantee credit payable to you is very small; entitlement to guarantee credit, not the size of the payment, is what matters.

If you receive only the savings credit part of Pension Credit, without guarantee credit, you do not get the automatic maximum. Your claim is assessed on your income and capital in the normal way, and you may still receive a partial or full reduction depending on your circumstances. Many pensioners who qualify for Pension Credit do not claim it at all — and therefore miss the Council Tax Reduction that would follow. If you are over State Pension age and on a low income, checking Pension Credit entitlement is worth doing before, or alongside, a Council Tax Reduction claim.

How the pension-age assessment works

The council compares your income with an applicable amount — the amount the scheme says a household in your circumstances needs to live on. If your income is at or below the applicable amount, you receive the maximum reduction. If your income is above it, the reduction is reduced gradually as income rises. Capital is counted too: the general ceiling is £16,000, except for guarantee credit recipients as explained above, and capital above a lower threshold is treated as producing a weekly income. The applicable amounts and thresholds are uprated from time to time, so the figures in your council's decision letter, not any figure quoted here, are the ones that apply to you.

Non-dependant deductions

If another adult who is not your partner lives with you — for example an adult son or daughter — the scheme assumes that person contributes towards the council tax, and a weekly non-dependant deduction is taken from your maximum reduction. The size of the deduction depends on the non-dependant's income and circumstances, and there are exemptions: no deduction is made if the non-dependant is a full-time student, receives certain benefits such as Income Support or guarantee credit, or if you or your partner receive Attendance Allowance, the care component of Disability Living Allowance, the daily living component of Personal Independence Payment, or an Armed Forces Independence Payment. The deduction is not a bill sent to the non-dependant; it simply reduces your reduction.

Backdating and reviews

Pension-age claims can be backdated for up to three months where the conditions for backdating are met, without the claimant having to show good cause in the way working-age claimants may need to. Once awarded, a pension-age reduction is reviewed when circumstances change and, in Scotland, automatically each year. You must still tell the council about changes — a new pension, a person moving in or out, or a change in savings — because an out-of-date award can lead to an overpayment that is added back to your bill.