Council Tax Reduction (low income)

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Updated 21st September 2022

Local Council Tax Reduction Scheme Consultation

We are reviewing the local scheme for working age people and want to know whether you agree with how we propose to run it in 2023/24. Click here for more information.

Our short survey will ask you for comments about various aspects of the scheme, and should take no longer than 10 minutes to complete.

Click here to complete our short survey

Council Tax Reduction (CTR) helps towards paying Council Tax. It is now a local reduction scheme decided by local councils and is not a benefit payment. 

Any CTR you are awarded will be shown on your Council Tax bill and will reduce the amount you have to pay.

You could receive help if you are on a low income, even if you are working. However, if you have more than £16,000 in savings or investments you will not usually qualify.

The reduction awarded will depend on:

  • the amount you are liable to pay
  • the needs of your family
  • your income,
  • your savings and
  • anyone else living with you

From 1st April 2018, all people of working age who live in Ipswich will pay at least 5% of their Council Tax bill. This is regardless of their income.

Apply for Council Tax Reduction

If you do not have a reduction showing on your bill and you think you may qualify, you will need to submit an application. You can find out if you qualify for any Housing Benefit/CTR by using our calculator.

Use the calculator

You do not have to use the Housing Benefit and CTR Calculator to make an online claim. However, if you do, the information you enter into it will automatically be saved into your online claim.

You can claim Housing Benefit and/or CTR online right now. If you wish to partially complete and save the form, then return to it at any time, you can.

Apply for Housing Benefit and/or Council Tax Reduction

For more information see our Make a claim page.

Any changes in your circumstances must be reported to us.

Council Tax Reduction Scheme details 

Details of the Council's adopted Council Tax Reduction Scheme can be downloaded below

The Council's previous Council Tax Reduction Scheme can be downloaded below:

See other Council Tax discounts and exemptions

CTR Scheme 2023/24

We are reviewing the local scheme for working age people and want to know whether you agree with how we propose to run it in 2023/24. Our short survey will ask you for comments about various aspects of the scheme.

About the Council Tax Reduction scheme

The current version of the Council Tax Reduction Scheme which was introduced in 2018 offers an up to 95% reduction on Council Tax bills for customers on low incomes.

We are proposing to increase the maximum rate of reduction to 100% from April 2023.

The current scheme is based on the previous Council Tax Benefit scheme and worked well alongside Housing Benefit. Now that Universal Credit has become the primary benefit for new customers of working age and payment of Universal Credit housing costs replaces housing benefit, it has become clear that the scheme does not work as well.

A minor monthly fluctuation of earnings results in recalculations of entitlement which lead to repeat billing for Council Tax. This has made budgeting difficult for applicants and created a bar to recovery, as each new change resets the recovery process.

To resolve this problem, we propose a change to the Council Tax Reduction (Working Age) scheme, moving households that receive Universal Credit to a new ‘banded’ scheme. This banded scheme allows for fluctuations in earnings and, as a result, does not require Council Tax to be recalculated as often.  Council Tax bills are reduced by different amounts depending on how much each customer earns.

Households on Universal Credit who do not have earnings are entitled to a full reduction on their Council Tax and will have nothing to pay.

Households that do not receive Universal Credit will remain on the previous 2018 scheme but can still receive up to 100% reduction in their Council Tax.

The scheme will use data provided by the Department for Work and Pensions for Universal Credit customers, allowing applications to be made and Universal Credit changes to be processed without the need of additional contact from the customer. Claims would be automatically backdated to when the customer began receiving Universal Credit.

 Proposed updates to the scheme

We propose two changes to the Council Tax Reduction scheme for working age people, one for Universal Credit customers and one for everybody else.

Council Tax Reduction for people who do not receive Universal Credit

Our scheme has worked well since it was introduced in 2018 for customers who do not receive Universal Credit.

We will continue the current scheme in line with Housing Benefit allowances, premiums and increases in social security benefits until customers move onto Universal Credit.

Council Tax reduction scheme for people who receive Universal Credit

Income bands

We propose to introduce income bands with contributions similar to those listed below. We may revise these draft contributions after more modelling is undertaken following any comments resulting from this consultation.

Monthly earnings less than £290.00                      No Council Tax contribution required          
Monthly earnings of £290 to £609.99Weekly contribution of £8.08
Monthly earnings of £610 to £1159.99Weekly contribution of £18.46
Monthly earnings of £1160 to £1844.99Weekly contribution of £27.69
Monthly earnings of £1845 to £2369.99Weekly contribution of £42.69
Monthly earnings of £2370 to £2899.99Weekly contribution of £55.39
Monthly earnings of £2900 and aboveFull contribution

We intend to keep a small number of bands to avoid the likelihood of customers moving between them after only a small change in earned income. Moving between bands would lead to rebilling and uncertainty of entitlement. The scheme encourages increasing hours for workers at the bottom or the middle of each band, without resulting in a change in their Council Tax Reduction entitlement.

In future years we will consider amending these income bands and contribution rates to track changes in Council Tax and National Living Wage. 

Non-dependant deductions

Non-dependants are expected to contribute towards the Council Tax.  We will keep the rate of non-dependant deductions used within the Council Tax Reduction Scheme the same as the Government uses for the Prescribed scheme.  The Government reviews and updates these every year. 

For illustration purposes the 2022/23 rates are shown below:

For each non-dependant per week

Not in Paid Work£4.20
In receipt of Universal Credit on the basis of no earned income    Nil
In receipt of Universal Credit with earned income working less than 16 hours week £4.20
In paid work whose gross weekly income is less than £224 £4.20
In paid work whose gross weekly income is between £224 and £388.99   £8.55
In paid work whose gross weekly income is between £389 and £483.99   £10.70
In paid work whose gross weekly income is £484 or more £12.85
Receiving Income Support, Jobseekers Allowance (income based) Nil
Receiving Employment and Support Allowance (income-related)  Nil
Receiving pension credit Nil

A non-dependant is someone aged 18 years or over who lives as part of the household but is not the partner/spouse.  It does not include someone living within the household who has a legally enforceable agreement to pay rent. Most typically non-dependants are adult children or elderly relatives.

If the non-dependants living in the household are married to each other or living together as a couple, we add their incomes together and take just one deduction.

Deductions are not made if the householder or their partner are registered blind, receiving Attendance Allowance or Disability Living Allowance (Care) or Personal Independence Payment (daily living component) or if the non-dependant themselves meets certain criteria (eg is a student, prisoner, in hospital for over 52 weeks)

100% liability

Offering up to 100% reduction in the working age scheme aligns the scheme with the Government’s prescribed scheme for pensioners.

Whilst local authorities can set their schemes based on less than 100% liability meaning that the billpayer must contribute towards their Council Tax irrespective of their income, this scheme will mean that the poorest households will not be required to contribute towards their Council Tax.

Minimum Award

The minimum award of CTR under this scheme is £1 per week.  This minimum award was introduced in 2018 and will continue for legacy customers. Universal Credit customers will be asked for fixed payments and, depending on liability and annual charge increases there may be occasion where the CTR award will be equal to less than £1 per week.

Transitional Protection

The Council has made a commitment that no customer will be disadvantaged in 2023/24 from the introduction of these scheme changes.  This means that the level of CTR will be awarded at the level of entitlement for 2022/23 or 2023/24 whichever is higher.  Universal Credit customers will transfer onto the new scheme either at the point their entitlement is higher than the 2022/23 entitlement under the new scheme or on 1st April 2024, whichever is the sooner.

 Removal of the legacy benefits scheme

The government has a target to move legacy benefit households (those receiving Tax Credits, Job Seekers’ Allowance, Housing Benefit and so on) to Universal Credit by the end of the 2024/25 financial year.

Households on our non-Universal Credit scheme will move to the Universal Credit banded scheme when their legacy benefits end and they start claiming Universal Credit. Recipients will not need to reapply for the reduction.

What happens next?

The survey will remain open from 21st September to 16th November 2022.

When the survey closes, we will collate all the responses we receive and produce a report on the findings with final recommendations on how we should run the Council Tax Reduction scheme.

Findings of the consultation will be presented to the Council’s Executive.  Any potential new scheme will be introduced in April 2023.

Please click here to complete the survey. It should take no longer than 10 minutes to complete.

Contact Details

Ipswich Borough Council,
Housing Services,
3E Grafton House, 
15-17 Russell Road,

Telephone icon

01473 432000