Council tax reduction

The rules on council tax reductions are set by the Scottish Government and run by local authorities.

Council tax deductions are applied after any disability reduction or council tax discount has been taken into account.

This content applies to Scotland

Eligibility

Claimants in receipt of the following benefits are entitled to full council tax reduction:

  • Income support

  • Income based job seekers allowance

  • Income related employment and support allowance

  • Guaranteed pension credit.

A claimant may also be eligible if they are on a low income and have savings of less than £16,000.[1]

Calculations

To calculate the amount of council tax reduction for claimants not in receipt of one of the above benefits, including those on universal credit, compare the amount of income a person has with their 'applicable amount'.

You can find details of the relevant year's applicable amounts in the Benefit rate section.

It should be noted however, that in Scotland, for the purposes of calculating the 'applicable amount' for council tax reduction the following must also be taken into account. [2]

  • When calculating the applicable amount for a household on universal credit with children, the CTR scheme does not apply the two child limit, making no distinction based on the number of children born on or after 6 April 2017;

  • severe disability premium (SDP) transitional payments are excluded - these were made to claimants previously in receipt of a legacy benefit with an SDP who experienced a cash loss on migration to universal credit

  • payments of young carer grant are excluded from the calculation of income and capital for CTR purposes.

  • Compensation paid under the Windrush Compensation Scheme is not counted as income and capital for CTR purpose

  • There is a capital disregard for reimbursement of amounts of maternity allowance which should have been paid to claimants between April 2015 and July 2017.

If the income is less than the applicable amount, they may be entitled to a reduction of 100%.

If their income is above their 'applicable amount', entitlement to council tax reduction is reduced by 20p for every £1 of income above the applicable amount.

If there are non-dependents in the home a set deduction may be made for them. The amount is set each year in regulations. [3] See the relevant year's section on 'non-dependent deductions' in the Benefit rates pages for more details.  

Alternative maximum council tax reductions (‘second adult rebate’)

This is intended to help where the liable person shares a home who does not share liability or pay rent (for example a person living with their adult son or daughter). [4] In practice these are the same as those treated for non-dependent deductions.

The second adult rebate can be received instead of (but not in addition to) council tax reduction.  When a person applies for council tax reduction the local authority will check which method gives the largest reduction and apply this as a ‘best buy’. [5]

Dwellings in bands E to H

From 1 April 2017, council tax rates and the way in which council tax is calculated will change. Properties in Bands E, F, G and H will be charged a higher percentage of the Band D rate than previously.

Households in these bands whose net income is below the Scottish median for their household type (£16,750 for single person households and £25,000 for others) may be entitled to claim an exemption from the increases to the banding system through the Council Tax Reduction Scheme.

Entitlement is dependent on a number of factors, including any capital held and the composition of the household. [6]

How to apply

An application must be made to the local authority. There may be a form to complete although some local authorities may make provisions to apply online.

Backdating

An award can be backdated to any date if ‘good cause’ can be shown.

All other applicants can request a backdate for up to six months. [7]

Decisions

The local authority must give their decision in writing. Where they have awarded council tax reduction, they will issue a revised ‘council tax demand notice’ adjusted to reflect the reduced liability. The local authority does not have to send a separate decision, but they may do so.

The council tax demand notice must contain the following information:

  • the right to ask for the decision to be reviewed

  • information about how the CTR has been calculated.

Reviews

In the first instance a request for a review should be made in writing direct to the local authority within two months of the decision. [8] The local authority must respond in writing within two months.

A further review can be requested from the Council Tax Reduction Review Panel, provided either the local authority review process has already been used, or where the local authority fail to respond within the two month time period.

The Council Tax Reduction Review Panel is an independent body which is part of the Scottish Tribunals Service.

Last updated: 24 February 2020

Footnotes

  • [1]

    reg.42 Council Tax Reduction (Scotland) regulations 2012 (Scottish SI 2013/303)

  • [2]

    regs. 2-3 The Council Tax Reduction (Scotland) Amendment (No. 3) Regulations 2019 SSI 2019/325  

  • [3]

    reg.67 Council Tax Reduction (Scotland) Regulations 2012 (Scottish SI 2013/303)

  • [4]

    reg.78 and Sch.2 Council Tax Reduction (Scotland) Regulations 2012 2012/303; reg.56 and Sch.5Council Tax Reduction (State Pension Credit) (Scotland) Regulations 2012 2012/319

  • [5]

    Commissioners decision CH/48/2006

  • [6]

    reg.14A Council Tax Reduction (Scotland) Regulations 2012 (Scottish SI 2012/303)

  • [7]

    reg.7 The Council Tax Reduction (Scotland) Amendment Regulations 2018 SSI 2018/69

  • [8]

    reg.90A(3) Council Tax Reduction (Scotland) Regulations 2012/303 (Scottish SI); reg.70(A)(4) Council Tax Reduction (State Pension Credit) (Scotland) Regulations 2012/319 (Scottish SI)