Council Tax reduction scheme rules

Summary of the Redbridge Council Tax Reduction Scheme for 2021/22

Eligibility

People entitled to Council Tax Reduction under this scheme will be those:

  • who have a liability to pay Council Tax in Redbridge for a dwelling which they occupy as their home; and 
  • who apply for Council Tax Reduction; and
  • who do not have assessed capital in excess of £16,000.

A person from abroad as defined in the Council Tax Benefit Regulations 2006 (as amended), is not eligible for Council Tax Reduction. 

A person who is temporarily absent from home, as defined in the Council Tax Benefit Regulations 2006 (as amended), or whose normal home is elsewhere is not eligible for Council Tax Reduction under this scheme. 

A person who is a student is only eligible for Council Tax Reduction under this scheme in the circumstances specified in the Council Tax Benefit Regulations 2006 (as amended).

The law sets out the definition of 'pensioner' for the purposes of the scheme. Those not defined as pensioners are defined as working age. 

 

New claims for Council Tax Reduction can be made using the following methods:

  • Online via the Council's website
  • If the Council receives an application for support via the Department for Work and Pensions it will consider the applicant as having claimed Council Tax Reduction 
  • If the Council receives notification of a claim made for Universal Credit or details of Universal Credit in payment via the Department for Work and Pensions it will consider the applicant as having claimed Council Tax Reduction

 

Applicants applying for Council Tax Reduction will be required to verify their identity, national insurance number, income and capital. If there are other people in the applicant's household, the applicant  may also be required to verify their details. 

If all the information needed is not on the claim form, there is something that needs clarifying or further verification is needed, the Council will contact the applicant allowing them 1 month to reply. If a reply is not received within 1 month a decision will be made based on the evidence available. 

Working Age Council Tax Reduction 

Eligible Council Tax

There are five levels of eligible Council Tax for working age applicants.

The applicant and/or any partner are receiving any level or component of disability living allowance, personal independence payment, armed forces independence payment or attendance allowance. 

The applicant and any partner have one or more dependent children in the household and either:

  • the applicant and any partner are receiving income support, or
  • the applicant and any partner are receiving income-based Jobseeker's Allowance, or 
  • the applicant and any partner are receiving income-related employment and support allowance, or
  • the applicant and any partner are receiving universal credit and the applicant and any partner are not in work, or 
  • the applicant and any partner are receiving contribution-based employment and support allowance and the applicant and any partner are not in work. 

The applicant and any partner have no dependent children in the household and either:

  • the applicant and any partner are receiving Income Support, or
  • the applicant and any partner are receiving income-based Jobseeker's Allowance, or
  • the applicant and any partner are receiving income-related Employment and Support Allowance, or 
  • the applicant and any partner are receiving Universal Credit and the applicant and any partner are not in work, or
  • the applicant and any partner are receiving contribution-based Employment and Support Allowance and the applicant and any partner are not in work. 

The applicant and and any partner have one or more dependent children in the household and either:

  • the applicant and/or any partner are in work and have combined net earnings of less then £300 per week, or
  • the applicant and any partner are not in work and are not receiving either:
    • Income Support, or
    • Income-based Jobseekers Allowance, or
    • Income-related Employment and Support Allowance, or
    • Universal Credit, or
    • Contribution-based related Employment and Support Allowance

               and the view of the Council is that the claimant or partner would be entitled to an income above were a claim to be made. 

The applicant and any partner have no dependent children in the household and either;

  • the applicant and/or any partner are in work and have combined net earnings of less than £225 per week, or
  • the applicant and any partner are not in work and are not receiving either:
    • Income Support, or
    • Income-based Jobseekers Allowance, or
    • Income-related Employment and Support allowance, or
    • Universal Credit, or
    • Contribution-based related Employment and Support Allowance

               and the view of the Council is that the claimant or partner would be entitled to an income above were a claim to be made. 

Earned Income 

For the purposes of Council Tax Reduction, net earned income will be calculated by taking into account gross income and deducting Tax, National Insurance and 50% of any Pension contribution. There are no other deductions from earnings. 

Capital 

Capital includes savings and investments held in any form (for example, bank and building society accounts, investment trusts and shares), from any source (for example, inheritance and redundancy payments). It will normally also include the net value of land and/or housing that the customer owns but does not occupy. 

Capital belonging to a partner is treated as the applicant's for the purpose of calculating Council Tax Reduction. 

Applicant's with capital of £16,000 or more will not be entitled to Council Tax Reduction. 

Non-dependant deductions 

People who share an applicant's accommodation but are not financially dependent on them are known as non-dependants. Non-dependants are typically grown up children, parents, or other relatives living as part of your household. Any non-dependants who normally share an applicant's accommodation may affect the amount of Council Tax Reduction that they receive. 

There are no non-dependant deductions for applicants in work age scheme 1. 

This table shows the deduction that will be made from Council Tax Reduction in respect of any non-dependants. 

Working age scheme   Weekly Deductions - Working Age
Working Age Scheme 1 No Deduction   
Working Age Schemes 2,3,4 and 5 Non-dependant is working £12.00 per week
Non-dependant is not working £5.00 per week
Non-dependant is getting Carers Allowance £0.00 per week 

Deductions for non-dependants will be made from the eligible Council Tax amount. 

Calculation of Council Tax Reduction 

As long as an applicant has less than £16,000 capital, they will receive the Eligible Council Tax amount less any non-dependant deductions. 

If the calculated Council Tax Reduction is less than £5.00 per week no Council Tax Reduction is awarded. 

For example

Eligible Council Tax                                                   £28.00 per week

Less non-dependant deduction                           £ 5.00 per week

Council Tax Reduction                                             £23.00 per week 

 

Pension Age Council Tax Reduction 

Eligible Council Tax 

For the purposes of Pension Age Council Tax Reduction, eligible Council Tax is:

  • 100% of the amount an applicant is liable to pay. 

Applicable amounts

Applicable amounts are also known as living allowances and they are set and reviewed annually by the Government. For the purpose of Council Tax Reduction, the Council continues to use the amounts set by the Government. 

Applicable amounts take into account the size of an applicant's family, their age and any extra needs that they may have. It is made up of three parts:

  • a personal allowance, and 
  • personal allowances for the children in the family, and 
  • premiums.

This table shows the applicable amounts for 2020/21.

Allowance

Amount
Personal allowance
Pension age before 1 April 2021  
Single pension age and over £191.15
Couple one pension age and over £286.05
Lone parent pension age and over £191.15
Pension age from 1 April 2021 and after 
Single pension age and over  £177.10
Couple one pension age and over £270.30
Lone parent pension age and over £177.10
Dependant Allowance Amount
All ages £68.60
Premiums Amount
Family £17.65 This does not apply for new claims from 1 May 2016
Family (Lone parent) £22.20 This does not apply for new claims from 1 May 2016
Disabled child £65.94
Disability - Single £35.10
Disability - Couple £50.05
Enhanced disability - single £17.20
Enhanced disability - couple £24.60
Enhanced disability - child £26.67
Severe disability - single £67.30
Severe disability - couple both disabled  £134.60
Carer

£37.70

Earned income 

For the purposes of Council Tax Reduction, net earned income will be calculated by taking into account gross income and deducting Tax, National Insurance and 50% of any Pension Contributions. 

The following amounts will be deducted from net income, as described about, before calculating Pension Age Council Tax Reduction.

Category

Weekly disregard

Single person £5.00
Couple £10.00
Lone parent £25.00
Worker receives a disability premium, is a carer, or receives Employment and Support Allowance (contribution based) £20.00
Additional childcare disregard - certain conditions must be met Up to £175.00 for 1 child and £300.00 for 2 or more children
Additional disregard for working over 30 hours £17.10

The above amounts will not be deducted from net income where the applicant and/or partner is in receipt of Universal Credit unless they are also in receipt of Attendance Allowance, Disability Living Allowance, Personal Independence Payments or Armed Forces Independence Payments.

Most other types of income will be taken into account in full, some have a £15.00 per week disregard but the following types of income are disregarded in full.

  • Housing Benefit payments
  • Discretionary Housing payments
  • In Work credit
  • Social Fund payments and loans
  • Child Benefit
  • War Disablement Pensions
  • Disability Living Allowance
  • Personal Independence payments
  • Attendance Allowance
  • War Widows and War Widowers Pension 
  • Armed Forces Compensation Scheme payments
  • Maintenance payments received for a child
  • Fostering payments
  • Social Services payments
  • Supporting People payments

Capital includes savings and investments held in any form (for example, bank and building society accounts, investment trusts and shares), from any source (for example, inheritance and redundancy payments). It will normally also include the net value of land and/or housing that the applicant owns but does not occupy. 

Capital belonging to a partner is treated as the applicants for the purpose of calculating Council Tax Reduction.

Applicants with capital of £16,000 or more will not be entitled to Council Tax Reduction. Capital below £6,000 is not counted. 

For working age applicants amounts between £6,000 and £16,000 will be taken into account at £1 per week for each £250 (or part thereof).

For pension age applicants amounts between £10,000 and £16,000 will be taken into account at £1 per week for each £500 (or part thereof).

Non-dependant deductions

People who share an applicant's accommodation but are not financially dependent on them are know as non-dependants. Non-dependants are typically grown up children, or other relatives living as part of your household. Any non-dependant who normally share an applicant's accommodation may affect the amount of Council Tax Reduction that they receive. 

This table shows the deduction that will be made from Council Tax Reduction in respect of any non-dependants. 

Non-Dependants Income Weekly Deduction - Pension Age
Income below £217.00 per week £4.05
Income between £217.00 and £376.99 per week  £8.30
Income between £377.00 and £468.99 per week £10.40
Income £469.00 or more per week £12.45

In receipt of Pension Credit, Income Support or Income based Jobseekers Allowance/Employment and Support Allowance. 

In receipt of Universal Credit and not working

NIL

Full time student

NIL

Deductions for non-dependants will be made from the eligible Council Tax amount. These income bands and deductions may be uprated annually. 

Calculation of Council Tax Reduction 

If an applicant's income is calculated as less then their applicable amount, and they have less then £16,000 capital, they will receive maximum 100% Council Tax Reduction  less any non-dependant deductions.

If an applicant's income is calculated as more than their applicable amount, the following calculation will be made. 

Income minus applicable amount = A

20% of A = B 

Eligible Council Tax minus Non-Dependant deduction minus B = Council Tax Reduction.

For example:

Income                                                                        £220.00 per week

Applicable Amount                                                £ 187.75 per week 

Difference (excess income)                                  £ 32.25 per week (A)

20% of the difference                                            £  6.45 per week (B)

Eligible Council Tax                                                £ 28.00 per week       

Less Non-dependant deduction                        £   4.05 per week 

Less 20% of the difference                                   £   6.45 per week       

Council Tax Reduction                                           £ 17.50 per week       

 

The following apply to both working age and pension age Council Tax Reduction 

Extended reductions

Applicants starting work after receiving a qualifying benefit for 26 weeks or more, may be entitled to an extended Council Tax Reduction. This means that they will receive the same level of support (normally maximum Council Tax Reduction) for a period of 4 weeks. 

The Conditions that need to be met are as follow:

  • the applicant or partner starts work or increases their hours or earnings; and 
  • the work is expected to last for at least 5 weeks; and 
  • the applicant or partner has been continuously receiving a qualifying benefit for 26 weeks or more; and 
  • entitlement to the qualifying benefit ends as a result of starting work/increasing hours or income.  

Start and end of entitlement 

Council Tax Reduction claims will normally start from the Monday following the date the claim is received at a designated office. 

Applicants who cease to be liable for Council Tax, will stop receiving Council Tax Reduction on the date that their liability ends

Applicants who cease to be entitled to Council Tax Reduction for another reason i.e, an increase in income will stop receiving their Council Tax Reduction from the Sunday following the change in their circumstances. 

Backdating 

Applicants, who wish to claim Council Tax Reduction for a period prior to the date they make their claim, may be entitled to backdating. The following rules apply to backdating:

  • the request must be made in writing
  • the applicant must demonstrate continuous good cause for any delay in making their claim
  • for working-age applicants Council Tax Reduction will not be backdated for more than 12 months from the date of a written request.
  • for pension age applicants Council Tax Reduction can be backdated automatically for up to 3 months. 

Change of circumstances 

Applicants must notify the Council of any change in their circumstances that may affect entitlement to Council Tax Reduction. This will include:

  • where they live
  • who they live with 
  • their income and savings.

Any change in circumstances must be notified as soon as possible and at least within 1 month of the change. Failure to do so may result in a loss of Council Tax Reduction. 

If you are getting Universal Credit you must also tell the Department of Work and Pensions about any changes. 

Adjustments to your Council Tax Reduction 

Council Tax Reduction will be calculated up to 31 March each year and will be credited to the applicants Council Tax account. If there is a change in circumstances that means an applicant is no longer entitled to Council Tax Reduction or entitled to a lower amount of Council Tax Reduction an adjustment may be created. 

Adjustments to Council Tax Reduction will be debited to the applicants Council Tax account and a new bill will be issued. All adjustments of Council Tax Reduction will be recoverable. Under certain circumstances, the Council may decide not to recover adjustments. 

Reviews

From time to time the Council may need to check the details of Council Tax Reduction awards to see if any of the details held have changed. If the Council needs to do this, the applicants may be sent a form, contacted by telephone or visited in their home. 

Failure to respond to a review may mean that council Tax Reduction is terminated. 

Appeals 

If an applicant disagrees with a decision the Council have made they have the right to appeal against it. This must be done in writing and within 1 month of the date the decision was made. 

The Council will review the decision and notify the applicant of the outcome. If the applicant is still not satisfied with the outcome, they may appeal to the Valuation Tribunal for England. 

Information sharing

The Council may give the information supplied by applicants for their Council Tax Reduction claim to other organisations, where the law allows this. 

The Council may check the information applicants have supplied with other sources, as allowed by law. 

The Council must protect public funds and may use the information applicants have provided to the Council previously, and on their application for Council Tax Reduction to prevent and detect fraud. This may include matching any information held about the applicant from other sources, including data held on computer records. The Council may also share this information, for the same purposes, with other organisations that handle public funds. 

Hardship Fund

The Council have set aside a sum of money to help households to pay their Council Tax in exceptional circumstances. If an applicant is experiencing exceptional hardship they may apply for additional help under this scheme. The Council will then consider the applicants circumstances and decide whether additional support can be granted. This fund is cash limited and there is no guarantee of additional support. 

 

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