Council tax reduction explained

Council Tax Reduction continues to provide money off your Council Tax bill if you are on a low income. The “reduction” is not to be confused with other Council Tax discounts such as Single Occupier Discount, which you can apply for, if you live alone. See the Council Tax pages for more details on discounts.

Bassetlaw District Council determines a Council Tax Reduction Scheme in January each year. There are two schemes, one for Pensioners and one for people of working age. This is because the Government sets the Pensioner scheme.

In summary the Pensioner scheme will;

  • Be based on weekly net income and living allowances set by the Government;
  • Have full income disregards such as war widows/ war disability income;
  • Have a maximum amount of 100% for pensioners (no cap);

The Working-age scheme will be based on income bands.

For working-age people who receive the severe disability premium in their benefits,  will be based on the weekly council tax liability, limited to the equivalent  of  a band C property (if higher)  but have a maximum amount or cap of 95%. Therefore, you would have at least 5% of your council tax to pay yourself.


Claim category for scheme


Pensioner (prescribed) scheme

Households where one or both have reached Pension age

Means-tested based on 100%


Working-age households eligible for a severe disability premium (or SDP transitional protection in UC)



Households in receipt of Income Support, Employment Support Allowance, Income-based Jobseekers Allowance or  maximum Universal Credit or with income equal to or less than £98.32 per week



Weekly income between £98.33 and £220.45



Weekly income between £220.46 and £292.30



Weekly income between £292.31 and £399.51



Income cut off point £399.52


We will also have:

  • a  hardship fund to help those with severe financial needs or exceptional circumstances;
  • an appeals process for disagreements with our decisions.

How we calculate eligible weekly income

The eligible income will be the net weekly income of the claimant (and partner) after eligible disregards have been applied. The disregarded incomes have not changed from the previous scheme. Examples of the disregarded incomes are:

  • Child Benefit
  • Child Maintenance
  • War Widows, War Disablement and Armed Forces Independent Payments
  • Personal Independent payments
  • Disability Living Allowance

Earnings disregards are:

  • Single person £5 per week
  • Couple £10 per week
  • Lone Parent £25 per week

We will also calculate a weekly tariff income for each £250 of capital you have and add this on to your weekly net income. The capital limit remains the same at £16,000

Non-dependant deductions

If you have another adult in your household who is not in receipt of maximum Universal Credit, Income Support, Jobseekers Allowance or Employment Support Allowance or Pension Credit, a “non-dependant deduction” will be deducted from your weekly CTR entitlement, as it did in the old scheme. However, we have simplified this to two flat rate charges:

  • Non-dependant not working but not in receipt of any of the above benefits £4.00 per week
  • Non-dependant in work £10.00 per week

Restriction to Council Tax Band C

There is no change to this restriction, therefore if you are entitled to CTR and your property is in band D or above, any entitlement will be restricted to the equivalent of a band C property.

Backdating rule

If you make a new claim for CTR after 1 April 2020, you may be able to get it backdated. You would need to demonstrate good cause for not claiming on an earlier date. You may be eligible to have any award backdated for up to one month, from the date of claim, or 1 April, whichever is later. Claims cannot be backdated prior to 1 April 2020.

How we work out Council Tax Reduction

First, we establish the weekly eligible income from the claimant and his/her partner, if they are in a couple. This varies depending on what the income is and whether any income disregards apply.  You must provide documentary proof of the income you receive. If you receive a benefit or allowance from the Department for Work & Pensions or Tax Credits, you should not rely on the DWP or HMRC notifying the Council. We can obtain proof of some benefits on-line such as Tax Credits, but not all of them, so please supply proof to the Council direct.

Earners and self-employed

We would assess your weekly eligible income from earnings, based on at least 5 weekly or 2 monthly pay slips, if you are employed. These should ideally be the 5 weeks or 2 months prior to your claim date.

If you are self-employed, we would have to assess income based on a calculated net profit, not on any income you draw from the business. It is important to note that some business expenses are allowable for income tax purposes, but may not be in the calculation of Council Tax Reduction, so the net earnings from self-employment may be different to the net profit figure HMRC use. We usually use the profit/loss accounts for the previous year and determine the benefit period that this will apply to. . We can also accept your account books showing income and itemised expenses. However, this will always be evidence from a past period, to estimate your earnings for the coming benefit period. You should tell us if there is a change in the business or potential net profit, as soon as it occurs. Do not wait until your year end to notify us, or there could be an overpayment, which would have to be paid back.

Severe Disability

If you receive Severe Disability Allowance (or the Transitional protection for loss of this in Universal Credit),  or the Higher rates of Disability Living Allowance (DLA) or Personal Independence Payment (PIP), we will consider whether you qualify to be placed in the Vulnerable CTR scheme which may attract a higher discount.


Last Updated on Wednesday, May 8, 2024