Council tax reduction

Summary of council tax reduction (CTR)

Summary of the Council Tax Reduction Scheme from 1 April 2017 and for 2018-2019

From 01 April 2017 the Council moved to an income band scheme to calculate working age residents entitlement to council tax reduction. Pensioners were not affected by this change. This was informed by a consultation with residents on making changes to the Council Tax Reduction Scheme, which ran from 18 July 2016 to 9 October 2016.

Here you can view and download the Council Tax Reduction Scheme (London Borough of Sutton) 2017 regulations.

Explanation of how to work out your Council Tax Reduction award and how much Council Tax to pay monthly:

  • work out your weekly household income (remember to take away the weekly income in table A)
  • work out what income band you are in and what discount you are entitled to using table B
  • work out the reduction in money you are entitled to in table C
  • take this amount away from Table D and this is your yearly amount of Council Tax to pay

Examples:

“Household A” earns £325 a week (after tax and National Insurance contributions) and lives in a band C property, so their income band is £301 - £350, they do not receive a single person discount.

Their Council Tax Reduction (Using Table C) would be £569.87. Take this away from their annual Council Tax bill of £1,424.67 and they would have to pay £854.80 a year, which is approximately £71.23 a month (payments over 12 months) or £16.44 weekly.

Table A - Income we ignore when calculating your weekly income

DLA (Disability Living Allowance)

PIP (Personal Independence Payment)

£10 of Student Grants/ Loans

Carer's Allowance

75% of child benefit

£20 Income from Boarders or rents

Foster/Guardian and Adoption payments

War disablement & Widows Pension

£20 of earned income (£50 if disabled and/or care leaver)

£50 maintenance for each child

Housing costs and disregarded income from Universal Credit

Table B - Income Band

             

Table C - Council Tax Reduction Award *

Weekly Income

Award

             

Band A property

Band B property

Band C property

Band D-H property

£0 to £150

80%

             

£854.80

(£641.10)

£997.27

(£747.95)

£1,139.74

(£854.80)

£1,282.20

(£961.65)

£151 to £200

70%

             

£747.95

(£560.96)

£872.61

(£654.46)

£997.27

(£747.95)

£1,121.93

(£841.44)

£201 to £250

60%

             

£641.10

(£480.83)

£747.95

(£560.97)

£854.80

(£641.10)

£964.62

(£721.24)

£251 to £300

50%

             

£534.25

(£400.69)

£623.30

(£467.47)

£712.34

(£534.25)

£801.38

(£601.03)

£301 to £350

40%

             

£427.40

(£320.55)

£498.64

(£373.98)

£569.87

(£427.40)

£641.10

(£480.83)

£351 to £400

30%

             

£320.55

(£240.41)

£373.98

(£280.48)

£427.40

(£320.55)

£480.83

(£360.62)

£401 to £450

20%

             

£213.70

(£160.28)

£249.32

(£186.99)

£284.93

(£213.70)

£320.55

(£240.41)

* Please note the amounts in brackets are for customers with a 25% discount or disregard.

Table D - Yearly 2018/19 Council Tax Banding **

Banding

A

B

C

D

E

F

G

H

2018/19

£1,068.50 (£801.38)

£1,246.59(£934.94)

£1,424.67 (£1,068.50)

£1,602.75 (£1,202.06)

£1,958.90(£1,469.18)

£2,315.08(£1,736.31)

£2,671.25 (£2,003.44)

£3,205.50 (£2,404.13)

** All claim types (of working age) are calculated using a maximum property banding of Band D.

If you have a non dependant(s), they are expected to contribute as follows:  

  • £5 - non worker
  • £10.00 - if they have gross earnings of £22,999 or less and
  • £30.00 - if they have gross earnings of £23,000 or above

This amount is taken off any weekly amount of Council Tax Reduction you would be entitled to.

Start an application for council tax reduction here.

Summary of the Council Tax Reduction Scheme from 1 April 2017 and for 2018-2019:

Income Revisions

That the non-dependent deductions for those 18 or over be revised to three flat rate levels as follows:

  • £5 per week - non worker
  • £10 per week- Gross wages of £22,999 or less
  • £30 per week - Gross wages of £23,000 or above

A deduction is an amount taken off a claimant’s entitlement to a council tax reduction on the basis that it is expected that non-dependants will contribute to housing costs.

  • That tariff income shall no longer apply to claimants with savings between £6,000 and £10,000.  Under the existing CTRS tariff income is applied as follows; £1 for every £250 of savings above £6,000.

  • That working claimants and/or their partner who have additional needs due to disability (defined as being in receipt of a relevant disability benefit) will have an earned weekly income disregard of £50.

  • That care leavers (someone who has been in the care of a local authority for a period of 13 weeks or more (prior to their 16th birthday)) will receive a higher earned weekly income disregard of £50 until their 25th birthday. Non-working care leavers will continue to receive 100% Council Tax Reduction (CTR) until their 25th birthday.

  • That child maintenance, paid by one partner to the other for their child[ren], shall be  treated as income; but the first £50 per child per week shall be ignored (disregarded).

  • That all self-employed income, including that from child-minding,  shall be calculated using the “minimum income floor”.  The Minimum Income Floor (MIF) is an assumed level of earnings for a self-employed claimant and/or their partner that matches their work expectations, for example the expected hours (35 hours for a couple and 16 hours for lone parents). The MIF is calculated by multiplying the number of expected hours by the National Minimum Wage (or equivalent national scheme) for the claimant's or their partner’s age group and deducting the relevant income tax and national insurance, the income for a CTR is calculated based on this net figure. If the claimant's or their partner’s actual earnings are above the MIF, the CTR is calculated based on those earnings. The MIF will not be applied to the newly self-employed claimants for a maximum period of 12 months. If both claimant and partner are self employed, their total self employed income is calculated as a whole, MIF would be applied if their total self employed earnings were lower than this figure.

  • That any claimant and/or partner with an income above £450 a week (after deducting income tax and national insurance) and after applying the earned income disregard will no longer be entitled to claim a CTR.

  • The income types to be ignored (disregarded) when calculating a CTR are set out in Table A.

Applicable Amounts and Premiums

  • That ‘applicable amounts’ will no longer be used in the calculation of a CTR. An “applicable amount” is a standard national figure which the Government believes reflects the basic living needs of a claimant and his or her family. Applicable amounts vary dependent on the circumstances of the claimant.

  • That ‘premiums’ will no longer be used in the calculation of a CTR. Premiums are generally awarded to help towards the costs of a disability where an individual receives a qualifying benefit, such as Attendance Allowance.  The premium is currently added to a claimant’s applicable amount, which increases the amount of income disregarded in calculating entitlement to CTR.

Other changes

  • That all claim types (of working age) shall be calculated using a maximum property banding of Band D.

  • That households with dependent children under the age of two will no longer have their entitlement calculated using the previous national scheme rules of council tax benefit. Their entitlement to a CTR will be assessed in the same way as households with children aged 2 to 18.

  • That all claimants, or their partners residing with them, who appear to the Authority to be entitled to claim a relevant social security benefit administered by the Department for Work and Pensions (DWP) or HMRC, such as Universal Credit, Job Seekers Allowance, Tax Credits and Employment Support Allowance, and who deliberately fail to claim that benefit(s), for the purpose of reducing their income and with the intention of increasing any entitlement to CTR shall not be entitled to claim a CTR.  The purpose of this is to ensure claimants maximise their income by applying for any relevant social security benefits.

  • That the “Temporary Absence rules” under the CTRS shall be aligned with the Temporary Absence rules applicable to Universal Credit.  The maximum period of temporary absence under the CTRS will however be set at one calendar month (extended to 6 months where the claimant, their partner or their child is receiving medically approved care, or 2 months in the case of the loss of a family member).

    This is not a full list of the rules. Please refer to the Council Tax Reduction Scheme 2017 and Council Tax Reduction Scheme 2018 detailed guides under downloads.