How the reduction is calculated

The calculation follows the same broad steps everywhere, even though the numbers inside each step come from the scheme that applies to you. Understanding the steps helps you read your council's decision letter, spot a mistake, and see why a change in income or household does — or does not — change your award.

Step 1: start with the bill after discounts

Take the full council tax charge for the property, then apply any discounts and the disabled band reduction. The single person discount of 25% is the most common. The figure left after discounts is the charge that Council Tax Reduction can reduce. This order matters: a reduction of 80% on a bill already reduced by the single person discount is 80% of the remaining 75%, not 80% of the original bill.

Step 2: compare income with the applicable amount

The scheme sets an applicable amount for your household — the weekly amount it says you need to live on, based on whether you are single or a couple, your age, and the number and ages of children. Your income, including earnings, benefits, pensions and other income for you and your partner, is compared with that amount. If your income is at or below the applicable amount, and you meet the capital test, you receive the maximum reduction your scheme allows. If your income is higher, the reduction falls as income rises above the applicable amount. The rate at which it falls — the taper — is set by the scheme; many schemes reduce the award gradually, but the exact taper is a local detail, so this site does not state a single national taper figure.

Step 3: count capital

Savings and investments are assessed alongside income. Above the general £16,000 ceiling you cannot qualify at all, except through the guarantee credit route for pension-age claimants. Below the ceiling, capital above a lower threshold is treated as producing a weekly income, which is added to your assessed income and so reduces the reduction. Your main home is not counted as capital. The thresholds are scheme figures and change over time, so use your council's current scheme document for the numbers.

Step 4: deduct for non-dependants

If a non-dependant adult lives with you — an adult child, relative or friend who is not your partner and not jointly liable for the bill — a weekly deduction may be taken from your maximum reduction, on the assumption that they contribute to household costs. The deduction depends on the non-dependant's income and benefit status, and several categories are exempt, including full-time students and non-dependants receiving certain benefits. To show the range only, one London council's published 2026/27 table sets non-dependant deductions between £5.20 and £15.95 a week depending on the non-dependant's gross weekly income. That is one council's example, not a national table: your council's deduction table governs your claim.

An illustrative worked example

Take a single working-age claimant in England whose bill after the 25% single person discount is £1,500 for the year. Her council's scheme allows a maximum reduction of 80%. If her income is at or below her applicable amount and no non-dependant deduction applies, her reduction is 80% of £1,500, which is £1,200, leaving £300 to pay for the year. If her income rises above the applicable amount, the reduction falls gradually under the scheme's taper, so she might receive, say, £900 instead — the exact fall depends on the taper and the size of the excess income. If an adult son on a good wage then moves in, a non-dependant deduction would reduce the award further. Every number in this example is invented to show the mechanics; none of it is a rate you can rely on.

Reading your decision letter

Your council's decision letter should show the charge, the discounts applied, the maximum reduction, your assessed income, any capital tariff, any non-dependant deduction, and the final reduction. If any input looks wrong — an income figure that is out of date, a household member who has left, a discount that is missing — contact the council promptly and ask for the decision to be looked at again. Errors are easier to fix before an incorrect bill has run for months.