How is my reduction calculated?

Page updated on: 04/09/2023

We look at:

  • How much money you have coming in and your personal circumstances
  • The amount of savings you have (more than £16,000 will normally disqualify you unless you are receiving Pension Credit Guarantee Credit).
  • The circumstances of your household members (age, sex, disabilities) and their relationship to you.

Use our benefit calculator to obtain an estimate of how much benefit you might get.

To make sure your reduction starts from the earliest date possible, you should contact us as soon as you need help to tell us that you want to make a claim. 

Council Tax Reduction normally starts from the day we receive your claim or intention to claim. However, sometimes we can pay from an earlier date. There are separate rules for pensioners and for working age claimants.

The age at which someone becomes a pensioner are changing so if you are not sure whether you would be considered working or pension age, you can calculate your pension age on the GOV.UK website.

If you are of pension age, your claim is automatically 'backdated' 3 months, provided you were of pension age throughout the 3 months, or back to the date you reached pension age if this was within 3 months. We just need the information necessary to assess your entitlement and you do not have to show any reasons for not claiming earlier.

If you are of working age, you must have a 'good reason' (or good cause) for not claiming sooner. 

There is no particular definition, but some examples are:

  • The death of a close relative;
  • Being in hospital or seriously ill;
  • Being wrongly advised by a person who should have known better, such as a benefit officer, the Citizens Advice Bureau, a social worker or Department of Work and Pensions (DWP) staff;
  • Language difficulties;
  • Being unable to manage your affairs and not having anyone to help you at the time.

As we will usually need some evidence, please provide as much information as you can to help us make our decision. The good reason must apply over the full period for which you want your award backdated.

The maximum period is 3 months from the time we receive your written request.

You can claim backdated Council Tax Reduction at the same time as your full Council Tax reduction claim by completing the relevant section on the form, or by contacting us at the address below.

When there are other adults, not including your partner, living in your home it is assumed they will help pay for household bills like council tax.  The amount of council tax you can claim benefit on will then be reduced according to their ability to pay.  This is called a non-dependant deduction.

The amount of council tax you can claim benefit on will be reduced by the following amounts for each non-dependant in the household.

Category Benefit reduced by

Aged 18 or over in paid work of 16 hours per week or more
Gross income £544.00 and above

Aged 18 or over in paid work of 16 hours per week or more
Gross income £445.00 to £553.99
Aged 18 or over in paid work of 16 hours per week or more
Gross income £256.00.00 to £444.99
Aged 18 or over in paid work of 16 hours per week or more
Gross income less than £256.00
Receiving Income Support, Job Seekers Allowance (Income Based), Employment and Support Allowance (Income Related) or Pension Credit No reduction
Aged 18 or over £5.80

No reduction in the benefit will be made for the following people:

  • People under 18.
  • People in full time education. A reduction will apply for Housing Benefit if the person takes up work during the holiday periods.
  • People receiving Work Based Training Allowance.
  • People on Income Support or Income Based Job Seekers Allowance, Pension Credit or Universal Credit on the basis that the person has no income.** For Housing Benefit only - a reduction will be applied from the person's 25th birthday.
  • People in prison.
  • People in hospital for more than 52 weeks. Separate periods in hospital are added together and are counted as a single period provided they are separated by intervals of 28 days or less.
  • A person not residing with you because they are a member of the armed forces away on operations.
  • People who are disregarded for Council Tax purposes (Council Tax Reduction only).

If you are jointly liable for council tax with someone other than your partner, any non-dependant deduction will be divided equally between you.

After your Council Tax Reduction (CTR) has been calculated we will send you a notification letter to explain whether you are entitled to a reduction. If you would like to know more about how we've calculated your CTR please download our example letter which gives you a step by step guide on the calculation including a brief description of what some of the phrases mean.

  1. Reason for calculation: The reason why the Council tax reduction (CTR) statement was produced.
  2. Weekly Income details: details we have of your household’s weekly income. This section should show all income and benefits for your household.
  3. Expenses: if you have child care costs they will be shown here.
  4. Claim reference: to help deal with queries quickly, please always quote your claim reference when you contact us.
  5. Council tax reference: Please quote this number if you contact the Council Tax Department.
  6. Gives excess income: Your total living allowance is subtracted from your total weekly income to give your household’s “Excess Income” for the purpose of CTR entitlement calculations.
  7. Council Tax Reduction period: The period this reduction calculation relates to on your bill.
  8. Capital: The itemised amounts of capital you have at the time the letter is issued should be shown here. E.g. Property, shares, savings etc.
  9. Less non-dependant deductions: Any non-dependant deduction amounts will be subtracted from your eligible weekly council tax in the calculation of CTR.
  10. Eligible weekly Council Tax: This is your annual Council Tax charge converted to a weekly amount.
  11. How your reduction is worked out: This shows the stages of your CTR calculation step by step.
  12. Total Living Allowance: This is the amount of money that the CTR scheme can allow for you (and your family), to have a basic standard of living after household costs have been taken into consideration. The total Living Allowance amount worked out here is then used in the calculation, which you can see under “How your reduction is worked out”.
  13. Relevant Percentage of excess income: Only a percentage of the Excess Income amount is used in the CTR calculation. The relevant percentage is set by the scheme rules at 20%.
  14. Gives amount of calculated reduction: This is the end result of the calculation and shows the weekly Council Tax Reduction amount due to you. The period reduction amount can also then be seen on your council tax Bill.
  15. Less 20% of excess income: The relevant percentage of your excess income will also be subtracted from the Eligible weekly council tax in calculating your reduction.