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Council Tax Reduction - your applicable amount

This advice applies to Scotland

To work out your Council Tax Reduction (CTR) the local authority may need to compare your weekly income to a fixed weekly amount the government considers is the amount you need to live on. This is known as your applicable amount. Your CTR is based on the difference between your income and your applicable amount.

Your applicable amount is made up of:

  • a personal allowance for all the relevant members of the family, and
  • any premiums, and
  • if you satisfy the conditions, either the work-related activity component or the support component, and
  • any transitional addition that you are entitled to after the Department for Work and Pensions (DWP) has converted your incapacity benefit or severe disablement allowance into Employment and Support Allowance.

Your personal allowance

Your personal allowance will depend on whether:

  • you are treated as a pensioner for CTR
  • you are single, or part of a couple, and
  • you have dependent children.

A 16 to19-year-old will still count as a dependent child if you can still claim child benefit for them.

Premiums

A premium is an extra amount which may be included in the calculation of your CTR.

More than one premium can be included in the calculation. It is important to make sure that all the premiums which apply to you are included.

Your calculation can have the following premiums:

  • family premium, for some CTR awards
  • disabled child premium
  • carer premium
  • disability premium
  • enhanced disability premium
  • severe disability premium.

CTR awards made before 1 May 2016

The family premium was removed for new CTR awards from 1 May 2016. When the CTR rules change, you can become entitled to a lower award of CTR than before the rule changed. Your higher award can in some cases be protected for a period. If your CTR includes a family premium from an award made before 1 May 2016, it will be protected and so it will continue to be included in your applicable amount until your circumstances change so that:

  • you no longer have any dependent children, or
  • you make a new application for a CTR.

Your calculation before 1 May 2016 could have either the lone parent rate of family premium, (but see next paragraph) or disability premium.

If you are entitled to both the lone parent rate of family premium and the disability premium, you will receive the disability premium because it is higher. However, you will also receive the ordinary rate of family premium while you are still entitled to it.

If you are treated as a pensioner, you cannot have a disability premium.

You can get an addition in the CTR calculation to reflect the way the DWP has assessed your capability for work-related activity. You can have either the work-related activity component or the support component.

Transitional addition

If your Incapacity Benefit or Severe Disablement Allowance (SDA) is converted into contributory Employment and Support allowance (ESA), you may be entitled to less CTR because you may not be eligible for a disability premium. A transitional addition can be added to your applicable amount so your CTR will not be reduced.

If you or your partner gets Universal Credit with housing costs, the figure for housing costs will be deducted from your applicable amount.

If you think there may be a mistake in the way your applicable amount has been worked out you should consult an experienced adviser, for example, at a Citizens Advice Bureau - where to get advice.

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