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Children's Handbook Scotland | 2024/25

8. Council tax reduction

• Who can get council tax reduction
• Amount of reduction
• Step one: calculate maximum council tax reduction
• Step two: if you get some means-tested benefits
• Step three: if you do not get these means-tested benefits
• Step four: work out your weekly income
• Step five: calculate your council tax reduction

Council tax reduction (CTR) is a means-tested scheme to help low-income households with council tax payments. You can get help through CTR whether or not you are in work, provided you satisfy the conditions of entitlement.

Your local authority is responsible for the administration of CTR.

Who can get council tax reduction

You qualify for CTR if:

•you or your partner are liable for council tax for the home in which you live; and
•you are ‘habitually resident’ in the UK, Ireland, Channel Islands or Isle of Man, have a ‘right to reside’ in the UK, and are not a ‘person subject to immigration control’. These terms are explained in CPAG’s Welfare Benefits and Tax Credits Handbook; and
•you and your partner have savings of £16,000 or less, unless you are on guarantee credit of pension credit (PC), in which case your capital is not taken into account; and
•your income is sufficiently low.

Amount of reduction

• Step one: calculate maximum council tax reduction
• Step two: if you get some means-tested benefits
• Step three: if you do not get these means-tested benefits
• Step four: work out your weekly income
• Step five: calculate your council tax reduction

The amount of CTR you get depends on your income compared with the amount the law says you need to live on. This section gives a very brief outline of how CTR is calculated, so you can see how a change in your circumstances or in your income may affect your entitlement.

Step one: calculate maximum council tax reduction

This is your net weekly council tax liability, after any discounts, reductions and non-dependant deductions have been made.

Step two: if you get some means-tested benefits

If you get income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) or PC (guarantee credit), you get your maximum CTR (Step one). In this case, you do not need to continue with the remainder of these steps.

Step three: if you do not get these means-tested benefits

If you do not get IS, income-based JSA, income-related ESA or PC (guarantee credit), you must compare your income with your ‘applicable amount’.

Your applicable amount is made up of different amounts - standard allowance, premiums and components - depending on your circumstances. The rules and amounts are similar to those for housing benefit (see here).

Step four: work out your weekly income

Earnings and some other types of income are taken into account in working out your CTR entitlement. Some kinds of income are ignored. See the relevant chapters of this Handbook for more information on how specific income (eg, fostering allowances and payments from the local authority) is treated.

Step five: calculate your council tax reduction

If your income is less than or the same as your applicable amount, CTR is the amount worked out at Step one – ie, your maximum CTR.

If your income is more than your applicable amount, work out 20 per cent of the difference. Your CTR is the amount you worked out at Step one minus 20 per cent of the difference between your weekly income and your applicable amount.