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Council Tax Reduction - your applicable amount

This advice applies to Wales

To work out whether you're entitled to Council Tax Reduction (CTR) and how much you’re entitled to, your local authority may need to work out your applicable amount. This is an amount the Government says you need to live on.

Top tips

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.

To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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.

If you or your partner do not have an award of Universal Credit, 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 DWP has converted your incapacity benefit or severe disablement allowance into Employment and Support Allowance.

If you or your partner have an award of Universal Credit, your applicable amount is your maximum amount for Universal Credit.

Your personal allowance

Your personal allowance will depend on whether:

  • you are classed 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.

There are six premiums and more than one 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
  • disabled child premium
  • carer's premium
  • disability premium
  • enhanced disability premium
  • severe disability premium.

Your calculation can have either

  • the lone parent rate of family premium, 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

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 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.

  • To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Next Steps

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