Guide About Council Tax Reduction

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3. Council Tax Reduction for working age people

Council Tax Reduction (CTR) for working age people is calculated based on the net income they and any partner receive. Their net income will place the customer in an income band and the band will determine the amount of CTR that a person is entitled to.

CTR is a discount on your Council Tax account rather than a benefit. Where there is an award of CTR or any changes throughout the year, the bill will show your income band as well as the relevant income band limits. You will no longer receive an award letter.

Working age applicants must pay at least 15% of their Council Tax charge. The table below shows the income bands and the maximum amount that Council Tax will be reduced by (percentage entitlement).

 

Income Band

Weekly income
Single, no dependent

Weekly income
Couple, no dependent

Weekly income
Lone parent, one dependent

Weekly income
Couple, one dependent

Weekly income
Lone parent, two or more dependents

Weekly income
Couple, two or more dependents

Band 1 (85%)

£0.00 - £80.00 £0.00 - £80.00 £0.00 - £160.00 £0.00 - £160.00 £0.00 - £235.00 £0.00 - £235.00

Band 2 (80%)

£80.01 - £160.00 £80.01 - £160.00 £160.01 - £235.00 £160.01 - £235.00 £235.01 - £310.00 £235.01 - £310.00

Band 3 (55%)

£160.01 - £235.00 £160.01 - £235.00 £235.01 - £310.00 £235.01 - £310.00 £310.01 - £385.00 £310.01 - £385.00

Band 4 (25%)

£235.01 - £310.00 £235.01 - £310.00 £310.01 - £385.00 £310.01 - £385.00 £385.01 - £460.00 £385.01 - £460.00

Band 5 (0%)

More than £310.00 More than £310.00 More than £385.00 More than £385.00 More than £460.00 More than £460.00

The basics of the CTR working-age scheme are:

  • CTR must be applied for and is not automatically granted.
  • The maximum discount that can be paid is 85%. Therefore applicants liable for Council Tax must pay at least 15%.
  • Applicants will receive a discount of 85%, 80%, 55%, 25% or no discount, depending on the level of their income and the income band they fall into.
  • Those receiving a passported benefit - i.e. Income Support, Jobseeker's Allowance (income-based) or Employment and Support Allowance (income-related) will automatically be placed into Band A (85% discount).
  • Applicants with savings above £6,000 will not qualify.
  • The income ranges shown in the above table are net weekly amounts.
  • Examples of income are earnings, self-employed earnings, tax credits, pensions, student grants/loans, Jobseeker's Allowance (contributions-based), Employment and Support Allowance (contributions-based).
  • Net weekly income (once Income Tax, National Insurance and any personal pension are deducted) will be taken into account when calculating CTR.
  • To support incentives to work, £25 per week will be disregarded from the net earnings and only one disregard will be applied per claim.
  • Income from Disability Living Allowance, Personal Independence Payments, Armed Forces Independent Payments, Child Benefit, Child Maintenance and War Disablement Benefits will continue to be disregarded when calculating CTR.
  • Carer's Allowance and the support component from Employment and Support Allowance will be disregarded in full.
  • Extra amounts may be disregarded from your income if someone in your family is disabled e.g. a child's Personal Independence Payment will be disregarded from your income.
  • The Minimum Income Floor (MIF) applies to most self-employed claims. This means that if you have been self-employed for 12 months or longer, your earnings are calculated using the National Minimum Wage for your age group, multiplied by 35 hours. If you earn more than the amount we assume your self-employment income to be under the MIF and we will use your actual amount of earnings to calculate your income.