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Council Tax Reduction - how is it worked out

This advice applies to England

To work out whether you're entitled to Council Tax Reduction (CTR) and how much you’re entitled to, your local authority will look at your weekly income and how much capital you have. Capital is things like savings and some types of property.

The rules about how a local authority works out your entitlement to CTR are different, depending on whether you are of working age or a pensioner.

Read this page to find out more about how a local authority works out if you're entitled to CTR.

What you need to know

If you're a woman, the age you can get Pension Credit is the same as your state pension age.

If you're a man, the age you can get Pension Credit might be different from your state pension age.

The GOV.UK website has an online calculator which tells you when you can get Pension Credit, available at www.gov.uk

If you’re of working age

If you’re of working age, your local authority can make its own rules about who is or is not entitled to CTR and can say how this should be worked out.

When you claim CTR, you're considered to be of working age if you're under the age for getting Pension Credit.

If you’re of working age, you will need to check with your local authority to find out what its rules are about who is entitled to CTR.

If you’re a pensioner

If you’re a pensioner, the Government has set out rules about how your local authority should work out your entitlement to CTR.

The rules about how CTR is worked out if you’re a pensioner depend on whether:

  • you get Pension Credit
  • you get the guarantee part of Pension Credit
  • you only get the savings part of Pension Credit without the guarantee part.

When you claim CTR, you’re considered to be a pensioner if you’ve reached the age when you can get Pension Credit. This doesn’t actually mean you must be getting Pension Credit – just that you’ve reached the age when you are entitled to make a claim.

If you get Pension Credit

If you’re a pensioner and either you or your partner get the guarantee part of Pension Credit, you are entitled to a full reduction on your council tax. The local authority will ignore both your income and your capital.

However, if you have a non-dependent adult living in your household, the amount of CTR you get may be reduced.

If you only get the savings part of Pension Credit but not the guarantee part, your local authority will use the Pension Service's calculation of your income and capital to work out how much CTR you should get. If your capital is more than £16,000 you won't be entitled to CTR.

If you’re a pensioner but you don’t get Pension Credit

If you’re a pensioner but you don’t get Pension Credit, you may still be entitled to CTR, although you might not get the full amount. The local authority will need to work out your income and capital.

How your capital is worked out

If your capital is more than £16,000 you won't be entitled to CTR. If you have some capital but it’s less than £16,000, you might still be able to get CTR, but you probably won’t get the full amount.

How your income is worked out

Once they’ve worked out how much income your household has coming in every week, your local authority will compare this with an amount the Government says you need to live on. This amount is called your applicable amount.

If your income is the same as or less than your applicable amount, you’ll get a full reduction on your council tax.

If your income is more than your applicable amount, you may be able to get some CTR, but this will depend on your income. If you have too much income coming in, you won’t get CTR. If there is only a small difference between your income and your applicable amount, you may still be able to get some CTR, but it won’t be the full amount.

Next steps

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