Council Tax Reduction Calculator 2025/26

Council Tax Reduction Scheme Explained

Council Tax Reduction (CTR) is a means-tested discount that reduces your council tax bill if you are on a low income. It replaced the national Council Tax Benefit in April 2013 when the government transferred responsibility to local authorities and cut funding by 10%.

For working-age applicants, each council in England now runs its own CTR scheme. The generosity varies significantly: some councils still offer up to 100% reduction, while others cap support at 75% or 80% and require a minimum payment. For pension-age applicants, the rules remain national and are set by the government. Pension-age CTR broadly mirrors the old Council Tax Benefit, with a maximum reduction of up to 100% and more generous savings thresholds.

The reduction is applied directly to your council tax bill before monthly instalments are calculated, so you simply pay less each month. There is no separate payment — the discount appears as a credit on your bill. CTR can be combined with other discounts such as the 25% single person discount or the disability reduction scheme, though the total reduction cannot exceed your full council tax liability.

Around 3.8 million households in England currently receive CTR. Despite this, the scheme is widely considered under-claimed, particularly among working households on low earnings and Universal Credit recipients who may not realise they need to apply separately.

Who Qualifies for Council Tax Reduction

You may qualify for CTR if your household income is below a set threshold, regardless of whether you are working. The main eligibility conditions are:

• Low income: If your assessed weekly income is below your council's "applicable amount" (a threshold that varies by household type), you may receive up to 100% reduction. The applicable amount is higher for couples, families with children, and disabled claimants.
• Passported benefits: If you receive income-based JSA, income-related ESA, Income Support, or Pension Credit Guarantee, you usually qualify for the maximum reduction automatically.
• Universal Credit claimants: Universal Credit does not include a council tax element. You must apply for CTR separately through your local council. If your UC award shows no or very low earnings, you will typically receive a significant reduction.
• Savings under £16,000: Capital above £16,000 usually disqualifies you entirely. Between £6,000 and £16,000, a "tariff income" of £1 per week for every £250 (or part of £250) above £6,000 is added to your assessed income. Below £6,000, savings are ignored. Pension Credit Guarantee recipients often face no upper savings limit.

How the Means Test Works

Working-age CTR uses a means-testing formula based on the national framework. Your council compares your weekly income (including any tariff income from savings) against your applicable amount. If your income is at or below the applicable amount, you receive the maximum reduction.

If your income exceeds the applicable amount, the reduction is tapered. The standard formula is:

Weekly CTR = Maximum CTR - ((Weekly Income - Applicable Amount) x 20%)

The 20% taper rate means that for every £1 of income above the applicable amount, your weekly council tax support falls by 20p. For example, if your income exceeds the applicable amount by £50 per week, your weekly CTR is reduced by £10 (£50 x 20%), which amounts to £520 less support per year. Some councils use slightly different taper rates or apply a cap, so your council's own calculation may differ.

Single Person Discount and Disregarded Persons

The single person discount is 25% off your council tax bill if you are the only adult (aged 18 or over) living in your property. It is not means-tested — income and savings are irrelevant. Over 8.4 million households in England currently claim it.

Certain people are "disregarded" and not counted as adults for council tax purposes. If you live only with disregarded people, you still qualify for the 25% discount. Disregarded categories include:

• Full-time students (on a qualifying course of at least 21 hours per week)
• Apprentices earning less than £195 per week
• Care workers earning less than £44 per week
• People with severe mental impairment (certified by a doctor with a qualifying benefit)
• Student nurses and youth training trainees
• Live-in carers who are not the spouse, partner, or parent of a child under 18
• 18 and 19 year olds still in full-time education

If all residents in a property are full-time students, the property is 100% exempt from council tax. A student certificate from your university or college is required.

Second Adult Rebate

If you do not qualify for CTR yourself but share your home with a second adult who is on a low income, you may be eligible for Second Adult Rebate (also called Alternative Maximum Council Tax Reduction). The rebate is based on the second adult's income, not yours, and reduces your bill by 7.5% to 25%. The full 25% applies where the second adult receives Income Support, income-based JSA, income-related ESA, or Pension Credit. Lower rebate rates of 15% or 7.5% apply at higher income levels. You cannot receive both CTR and Second Adult Rebate — your council awards whichever is higher.

Regional Differences

CTR operates differently across the UK nations. In England, each council designs its own working-age scheme, leading to significant variation in maximum reductions, taper rates, and minimum payments. In Scotland, a single national Council Tax Reduction scheme applies to both working-age and pension-age applicants, providing more consistency. In Wales, a national scheme also applies; the Welsh Government removed the previous requirement for working-age claimants to pay a minimum contribution, meaning eligible households can receive up to 100% reduction. Across all three nations, the pension-age scheme follows the same national framework.

How to Apply for Council Tax Reduction

Apply directly to your local council, not to HMRC or the DWP. Visit gov.uk/apply-council-tax-reduction to find your council's application form. You will need your council tax account number, National Insurance number, proof of income (payslips or benefit award letters), and bank statements covering the last two months. Claims can be backdated — up to 3 months automatically for pension-age applicants, and sometimes longer for working-age applicants if you show good reason for the delay. Processing typically takes 2 to 4 weeks, after which your bill is automatically adjusted.