What is Council Tax Reduction?
Council Tax Reduction is means-tested help with the cost of council tax. It is for people who are liable for council tax on the home they live in and whose income, and capital, are low enough under the scheme that applies to them. The help is not a cash payment. Your council credits your council tax account, and the bill you receive shows the lower amount you actually have to pay.
From Council Tax Benefit to local schemes
Before April 2013, help with council tax came through a single national benefit called Council Tax Benefit, run under Department for Work and Pensions rules. In April 2013 it was abolished and replaced by Council Tax Reduction. The pension-age scheme stayed national, set by central government regulations. The working-age scheme in England was localised: every billing authority in England must design and publish its own scheme each year. Scotland and Wales took a different path and each kept a national scheme covering both working-age and pension-age claimants, with the details set by their own governments.
That history explains the single most confusing thing about the system today. Ask two people in different parts of England what percentage of their bill Council Tax Reduction covers, and you may get two different answers — and both may be right, because their councils run different schemes. The same question in Scotland or Wales has a single national answer, subject to the claimant's own circumstances.
Reduction, discount, exemption — keep them apart
| Help | What it is | Based on |
|---|---|---|
| Discount | A percentage off the bill, for example 25% for a single adult household | Who lives in the property and who counts for council tax |
| Exemption | No council tax due for the property at all | The property or its occupants, for example a home occupied only by full-time students |
| Reduction (CTR) | Means-tested help credited to the bill | Income, capital and household circumstances under the scheme |
Discounts and exemptions are worked out first. Council Tax Reduction is then calculated on the bill that remains after them. A person living alone, for example, first gets the 25% single person discount, and any reduction is a percentage of the remaining 75% — not of the original full bill. The disabled band reduction, which moves a property down one council tax band where extra space or adaptations are needed for a disabled person, works the same way: it lowers the charge first, and the reduction follows.
Who runs it, and who decides
Your local council — the billing authority for your address — runs the scheme, takes the claim, asks for evidence, makes the decision and sends the revised bill. The Department for Work and Pensions does not decide Council Tax Reduction claims, and neither does HM Revenue and Customs, although information about benefits you receive is shared with the council to support the assessment. If you move to a new council area, you must claim again with the new council: a reduction does not travel with you.
What it is not
Council Tax Reduction is not help with rent — that is Housing Benefit or the housing element of Universal Credit. It is not a grant, a loan or a cash benefit, and it cannot be spent on anything else, because it never reaches your bank account. It does not, by itself, clear council tax arrears from earlier periods, and in Scotland it does not reduce the water and sewerage charges that appear on the same bill. Each of those limits is explained on the page where it matters.
Some councils still call the help Council Tax Support. The name on your council's website may differ, but the help is the same thing: a means-tested reduction of your council tax bill.