Bands E-H relief Council Tax Reduction
What is bands E-H relief Council Tax Reduction (CTR)?
Band E-H relief CTR is a new form of Council Tax Reduction, which is intended to provide relief for people in band E-H properties on low incomes in Scotland. From 1 April 2017, council tax for properties in bands E-H will increase.
This is one of the three types of council tax reduction (CTR) that people on low incomes can be eligible for to reduce the amount of their council tax bill. The other types of CTR are 'main CTR' and 'second adult rebate'. You can only be awarded one type of CTR, which is the scheme that gives you the biggest reduction on your council tax bill.
You should also check whether you are eligible for main CTR or second adult rebate to see which of the three you should apply for. You can also get advice about this from your local Citizens Advice Bureau - where to get advice.
- More about the types of council tax reduction
- More about eligibility for second adult rebate
- More about eligibility for main CTR
The rules for bands E-H relief CTR are different than the existing rules for main CTR.
This item explains how to work out if you are eligible for this type of council tax reduction and how much of a reduction you should receive.
To be eligible for this type of CTR you must fit the following criteria:
- the home you want a reduction for is in bands E-H (this will be stated on your council tax bill), and
- you live in the property as your main home, and
- you are liable to pay council tax, and
- your capital is below a certain amount, and
- you meet the residence rules, and
- your income is below a certain amount.
These are the same eligibility rules for main CTR, but with two key differences: the reduction must relate to a home in bands E-H, and you must also meet the special rules about income specific to this type of CTR.
To be eligible for bands E-H relief council tax reduction, you must have:
- no income in the week, or
- less than £321 per week if you are single, with no children, or
- less than £479 per week for all other households.
Some money you receive is ignored and treated as if you have no income. Follow the steps below for calculating income.
Are you a pensioner or non-pensioner?
The band E-H relief is available to both pensioners and non-pensioners. It is important to establish if you are a pensioner or non-pensioner, because income is calculated differently for the two.
“Pensioner” has a particular meaning under the council tax regulations. You are treated as a pensioner for CTR calculations if:
- you, or your partner, has reached the qualifying age for state pension credit (not necessarily your actual age, see next paragraph), and
- neither you, nor your partner is receiving income support, income-based jobseeker's allowance (JSA) income-related employment and support allowance (ESA) or universal credit.
You can use the tool on GOV.UK to check your pension credit qualifying age, available at www.gov.uk.
If you are part of a mixed-age couple, where you or your partner is above the qualifying age for pension credit, and the other person is below, the pensioner may be able to apply on behalf of both of you.
Working out weekly income for pensioners
If you are treated as a pensioner for CTR calculations there are special rules about how your income is treated when calculating CTR.
The rules depend on whether you or your partner:
- get the guarantee part of pension credit
- get the savings part of pension credit, but not the guarantee part
- don't get pension credit.
The rules about calculating your income for CTR are complicated. Your local authority website may have a tool that you can use, but if you want more information about how income is treated for CTR, you should consult an experienced adviser, for example, at a Citizens Advice Bureau - where to get help.
If you or your partner get the guarantee part of pension credit, or both the guarantee part and the savings part, your income is ignored and you will be treated as having no income. You will be eligible for bands E-H relief CTR, and you will be entitled to the maximum CTR, but there may be a deduction for any non-dependants who live in your household.
If you or your partner get the savings part of pension credit but not the guarantee part
If you or your partner get the savings part of pension credit but not the guarantee credit, the Pension Service will need to give your local authority the figure for your income that they used to calculate your savings credit. The local authority uses this figure to begin to work out how much CTR you are entitled to but some adjustments will have to be made to the figures.
If you don't get pension credit
If neither you nor your partner gets pension credit, the local authority will need to work out your income as a weekly amount to see if you are entitled to CTR and, if you are, how much CTR you are entitled to. Your income includes your partner's income. If you are claiming Universal Credit (UC), your local authority should use the UC maximum amount for your income.
If you don’t get UC, your income is worked out in a similar way to someone who is not treated as a pensioner.
Working out weekly income for non-pensioners
There are special rules about how your income is treated when calculating CTR if you are not treated as a pensioner.
The local authority will need to work out your income as a weekly amount to see if you are entitled to CTR and, if you are, how much CTR you are entitled to. Your income includes your partner's income.
Income usually means money that you get regularly, periodically or as a series of payments. It includes things like earnings and certain benefits, pensions and maintenance. Some income is disregarded, or partly disregarded. This means that all or part of it is ignored, so it is not included in the calculation of your income for CTR. You may still be asked to declare it when applying for a CTR. There are special rules if you get Universal Credit.
Usually, only income that you hold now is counted, but there are special rules that can be used to treat you as still having income or capital that you have given away, or money that you are entitled to but you have not applied for.
To work out how your earnings from employment affects your CTR, your local authority must:
- decide whether or not a payment counts as earnings
- work out your gross earnings
- deduct income tax, national insurance and certain pension contributions
- if you are not paid weekly, convert the result into a weekly amount.
There are special rules for self-employed income.
If you have capital between £6,000 and £16,000, for example savings, your local authority will treat it as a kind of income called tariff income.
The rules about calculating your income for CTR are complicated. Your local authority website may have a tool that you can use, but if you want more information about how income is treated for CTR, you should consult an experienced adviser, for example, at a Citizens Advice Bureau - where to get advice.
If you, or your partner, get Universal Credit (UC), the local authority must use the figure for your income that the DWP used to calculate your Universal Credit, provided either by the DWP, or by you from your UC award information.
But if your income is 'subject to frequent change', the local authority can instead estimate your income over a period of up to one year. If you do not agree with how your income has been estimated or do not understand how the average was worked out you should consult an experienced adviser, for example, at a Citizens Advice Bureau - where to get advice.
How much council tax reduction will you get?
If you have worked out that your weekly income is:
- zero (for example, if you or your partner get the guarantee part of pension credit)
- less than £321 per week if you are single, with no children, or
- less than £479 per week for all other households
and you meet the other eligibility criteria, you are entitled to 100% of the maximum council tax reduction.
The maximum council tax reduction is calculated by the local authority based on a complex formula. If you are not sure that the amount you have been awarded is correct, you can seek help from an adviser at your local Citizens Advice Bureau - where to get help.
Remember that you can should check whether you are also eligible for main CTR or second adult rebate as you will only be awarded one.
Changes in circumstances
If your circumstances change, for example your income changes, you will need to tell the local authority.