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Council Tax Reduction - your applicable amount

This advice applies to Scotland

Before you can work out your applicable amount for Council Tax Reduction (CTR) you have to check if you can get CTR based on your circumstances.

If you do not get a benefit or pension credit that means you get full CTR the local council has to compare what income you and other members of the household get to decide if your income is higher than a figure called 'the applicable amount'. This is a figure that the government has decided is enough for you and your family to live on.

Your CTR is based on the difference between your income and your applicable amount.

How much is the applicable amount

Your applicable amount is made up of:

  • a personal allowance for all the members of the family relevant to the application, and
  • any premiums based on special circumstances, for example a disability premium because someone in the family is disabled, and
  • either the work-related activity component or the support component if they apply to you, and
  • any transitional addition that you're entitled to after the Department for Work and Pensions (DWP) has converted your incapacity benefit or severe disablement allowance into Employment and Support Allowance.

The local council can help you to work out what your applicable amount is. The applicable amount is a figure worked out according to your own circumstances and who you live with. This means it is not the same for every household.

You can also get more advice at a Citizens Advice Bureau.

Your personal allowance

Your personal allowance will depend on whether:

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

A 16 to 19 year old will still count as a dependent child if you can still claim child benefit for them.

Find out about when you are treated as a pensioner for CTR and when you can claim child benefit.

Premiums

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

More than 1 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. This might also be referred to as 'disability income guarantee' 
  • 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're 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. More about the limited capability for work-related activity assessment.

Transitional addition

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

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 is a mistake in the way your applicable amount has been worked out you should get advice at a Citizens Advice Bureau.

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