COUNCIL TAX REDUCTION FOR PENSIONERS

Council Tax Reduction For Pensioners | November 2023

For pensioners in the UK, council tax can make up a significant part of monthly expenses. However, there is some good news.

A council tax reduction scheme can help to reduce this burden, giving pensioners more financial freedom. Read on to find out more about council tax reductions, and what they could mean for you.

Understanding Council Tax Reduction for Pensioners

Council tax reduction is a scheme which helps pensioners to lower their council tax bill. This scheme, sometimes called council tax support, is available to people of state pension age and others who meet specific criteria.

Council tax reduction schemes are administered by local councils across the UK. To determine how much council tax reduction you are entitled to, it is important to check the eligibility criteria and level of support of your specific council, as they can vary.

The council tax reduction you receive depends on many factors. These include your age, income, whether you claim benefits, and the number of other adults (non-dependants) in your household.

To help residents estimate potential entitlements, councils offer online calculators and advice services.

It’s essential to note that council tax reduction differs from single person discount. Single person discount is a 25% reduction on council tax bills for people who live alone.

Alternatively, depending on the circumstances, council tax reduction can offer more substantial support.

You can also watch this video on Youtube here.

Eligibility Criteria for Pensioners’ Council Tax Reduction

Eligibility for council tax reduction depends on a few factors. These include being of state pension age, and living in the property for which you’re responsible for paying council tax.

Remember that eligibility is based on your income and capital, such as earnings, pensions, benefits, and savings. Each council sets thresholds, those with lower incomes being more likely to be entitled.

Whilst the receipt of certain benefits such as Income Support can indicate eligibility, the receipt of Universal Credit may instead affect entitlement. Consequently, it is necessary to check with your council for the latest requirements.

As it is likely that the rules of your local council may differ, it’s good to check with your local council to understand their specific eligibility criteria.

How to Apply for Council Tax Reduction

Applying for council tax reduction is straightforward, typically being able to apply online through your local council’s website. Some councils also allow applications by post or in person.

When applying, you’ll need to provide information about your finances. This will help the council to decide whether you’re eligible for council tax reduction and how much reduction you might receive.

This information should include your income, savings, and details of certain benefits you receive.

Remember, if your circumstances change, it is necessary to inform your council. Changes could include a change in income, moving house, or the number of people living in your property, all of which may affect your eligibility for council tax reduction.

Calculation of Council Tax Reduction for Pensioners

Council tax reduction is calculated based on your income and circumstances. Your council compares your income with a figure called the ‘applicable amount’.

Depending on whether your income is less than or equal to the applicable amount, you could receive full council tax reduction.

The government decides the applicable amount and factors in your personal circumstances, meaning it’s higher for people who are severely disabled or have children.

If you have over £16,000 in savings, you usually won’t be eligible for council tax reduction. However, some exceptions apply, especially for those receiving the guarantee part of pension credit.

Impact of Savings and Assets on Council Tax Reduction

Savings and assets can impact your eligibility for council tax reduction. For instance, if your savings exceed the capital limit set by your local council, you might not be eligible for the reduction.

The capital limit is usually £16,000. If your savings are below this limit, they won’t affect your council tax reduction.

However, if you receive the guarantee part of the pension credit, your savings won’t affect your council tax reduction. This is because people receiving the guarantee part of pension credit are ‘passported’ to full council tax reduction.

Furthermore, other factors can affect your eligibility. For example, owning a second property could affect your entitlement to council tax reduction.

"Council tax reduction schemes are administered by local councils across the UK."

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Council Tax Reduction Versus Council Tax Support

Council tax reduction and council tax support are two terms used interchangeably. They both refer to the same benefit aimed at helping individuals with their council tax bills.

However, council tax reduction differs from other council tax discounts or exemptions.

These can include single person discounts, disability reductions, or discounts for unoccupied properties, Each of which have their own eligibility criteria, meaning it’s possible to simultaneously be eligible for more than one discount or reduction.

Circumstances Affecting Pensioners’ Council Tax Reduction

Various circumstances can affect your eligibility for council tax reduction. For instance, changes in your income, savings, or the number of people living in your house can affect your entitlement.

If you start or stop receiving certain benefits, your council tax reduction may be affected. For instance, if you start receiving universal credit, you may no longer be eligible for council tax reduction.

It’s vital to inform your local council of any changes to your personal circumstances, considering that each council has its own rules for determining eligibility. This will ensure that you receive the correct amount of council tax reduction.

Local Council Policies and Pensioners’ Council Tax

As previously mentioned, each local council administers council tax reduction with its own eligibility criteria.

Local councils also have different policies for dealing with changes in circumstances. Whilst some councils might adjust your council tax reduction immediately, others might revise it at the end of the tax year.

Disputing Council Tax Reduction Decisions

If you disagree with your council tax reduction decision, you can challenge it. This is known as making an appeal.

You should first contact your local council, providing them with the opportunity to explain their decision and consider any new evidence you provide.

If you still need more, you can appeal to the Valuation Tribunal. This is an independent body dealing with council tax and business rates disputes.

They can decide whether the council has made the correct decision about your council tax reduction. Remember, you may appeal against the decision in writing within one month of the date of decision.

Resources for Additional Financial Assistance

Other resources are available if you need help with your council tax bill. For example, you might be able to claim other benefits, such as housing benefit or pension credit, which can help with your living costs and might make you eligible for more council tax reduction.

Charities can also offer advice and support regarding council tax reduction and related issues. For example, Age UK has a lot of information about benefits for older people, including council tax reduction.

Remember, if you’re struggling to pay your council tax, it’s important to speak to your local council. They will provide necessary advice and might be able to help you with your payments.

Paying Council Tax and Receiving Reductions

For many pensioners, it can be daunting to figure out how to pay council tax, whilst also maximising reductions. Let’s break it down.

Council tax is usually paid in ten monthly instalments, with two months of non-payment per year. Some councils allow payments over 12 months, making the monthly cost more manageable.

If you’re entitled to a council tax reduction, it will be automatically deducted from your bill. Therefore, it is important to ensure that you receive your council tax reduction, holding the potential to significantly affect your monthly budget.

If your circumstances change (for example, if you start to claim universal credit) it’s essential to inform your local council, as it may affect the amount of council tax reduction you can receive.

Income-Related Employment and Council Tax Reduction

Income-related employment is vital to determining your eligibility for council tax reduction. If you’re in low income employment or receive an income-related employment support allowance, you might be entitled to council tax reduction.

Your earned income, including wages and pension contributions, is considered when calculating your council tax reduction. If your income is below a certain threshold, you may pay less council tax.

Therefore, if your income changes, it is essential to speak to your local council in order to determine how it will affect your eligibility.

Pension Credit and Council Tax Reduction

State pension credit is an income-related benefit, its two comprising parts being guarantee credit and savings credit.

Whilst guarantee credit tops up your weekly income if it’s below £201.05 (for single people) or £306.85 (for couples), savings credit is an extra payment for people who saved some money for retirement.

If you receive pension credit, you might be entitled to more council tax reduction. This is because the amount of council tax reduction you can get is based on your income, and pension credit can be counted as income.

If you’re a pensioner whose income is too high to receive Council Tax Reduction, you could apply for Second Adult Rebate.

If you receive the guarantee part of pension credit, your savings won’t affect your council tax reduction. As was mentioned previously, people receiving the guarantee part of pension credit are ‘passported’ to full council tax reduction.

Council Tax Reduction for Working Age Residents

It is important to note that council tax reduction isn’t just for pensioners. Rather, working age residents can also apply for council tax reduction if they meet certain criteria.

If you’re a working age resident with low income, you could be eligible for council tax reduction. For instance, this includes people on universal credit, income-related employment support allowance, and other income-based benefits.

When calculating your council tax reduction, your local council will consider your income, including any earned income, benefits, and pension contributions.

Therefore, those on a lower income may be entitled to paying less council tax. If you think you should be paying less council tax than you are, it’s always best to get in touch with your local council, allowing them to resolve any issues.

Rent and Council Tax Reduction

If you’re a tenant, you still have to pay council tax. However, you might be entitled to a council tax reduction based on your income and circumstances.

Unless you are receiving housing benefit or universal credit to help with your rent, the amount of rent you pay does not directly affect your council tax reduction. This could affect your income calculation for council tax reduction.

If you’re struggling to afford to pay your council tax, even after any reduction, it’s important to speak to your local council. They can provide advice, potentially offering to help you with your payments.

FAQ

1. How can I receive council tax reduction if I am in income-related employment?

You might be eligible for council tax reduction if you are in income-related employment. Council tax reduction is a means-tested benefit which considers your income, including earnings from employment.

Whilst rules vary from council to council, you may be eligible if you have a low income, even if you are working. You can apply through your local council, who will then evaluate your income and circumstances to decide if you are entitled to the reduction. Often, a quick phone call or online query can establish your eligibility.

2. Can I get a council tax reduction if I have a severe mental impairment?

Individuals with a severe mental impairment are usually exempt from paying council tax. However, they must be medically certified as severely mentally impaired by a doctor, and must be eligible for, but not necessarily receiving, one or more benefits. Examples of this include the disability living allowance and the personal independence payment.

The household is exempt from council tax if all adults are severely mentally impaired. Alternatively, if only one adult in the household is severely mentally impaired and no other adults live there, they are entitled to a 25% discount on their council tax bill.

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