If neither of these applies to you, the next step is to calculate the amount of your household’s weekly income. This is done by adding together all the money regularly coming into your home. Any money received at frequencies of more than a week should be converted to weekly amounts.

If you are self-employed you’ll normally be treated as earning the equivalent of a thirty-six-hour working week, paid at the national living wage.

After adding together all of your income, the next step is to subtract from this weekly amount any income that is shown in table A. This is income that we ignore when calculating your weekly income. 

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

The final weekly amount is then compared to the table below. This is to determine the amount of Council Tax reduction you receive. This will be between zero and up to eighty percent of the maximum annual cap of £2,166.18.

For 2024-2025, if your annual charge is greater than £2,166.18, you are liable to pay the remaining amount of Council Tax in full. 

Net Weekly Income

Percentage of maximum reduction (%)

Less than or equal to £203.99

80

£204.00 to £253.99

70

£254.00 to £303.99

60

£304.00 to £353.99

50

£354.00 to £403.99

40

£404.00 to £453.99

30

£454.00 to £503.99

20

£504.00 and over

0

Additional important limits 

There are two other limits to the amount of reduction you receive, these are:

  1. Non-dependent deductions

Any adult member of your family who lives with you is required to contribute towards the Council Tax you are charged. We call these individuals non-dependants.

The amount they are required to contribute is based on their income. This contribution is then subtracted from the amount of any reduction you are entitled to, for example: 

  • your annual council charge is £801.38 or £15.37 a week
  • your assets and savings are less than £10,000.00 and 
  • your income is £300.00 a week 

This entitles you to a fifty percent reduction of £7.69 a week. 

If you share your home with another adult member of your family who is not working, they are required to contribute a further £5.00 each week towards your Council Tax. 

This is deducted from the amount you are entitled to give a net weekly reduction to £2.69. 

This means that your Council Tax bill for the year will be £661.12

Contributions of non-dependant members of the household

The weekly financial contribution for each non-dependent member of your house will be:

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

2. Start dates of reduction awards

Your entitlement won’t start unless you have made an application and it has been approved. Entitlements will begin from the Monday following the date at which you apply.  

If your circumstances change and you are no longer entitled you must apply again.

If you are not entitled to a Council Tax reduction at the start of the year, any reduction you receive will be calculated from the date of your application and not apply to your entire bill.

If you have moved into a new property you must apply for a reduction in the same week of your first bill. Otherwise you’ll need to pay the full charge up to the point at which you make an application.

Example Council Tax Reduction Award

  1. Mr Pink and his partner are not presently entitled to a reduction.
  2. their home is a band E property and they receive their annual demand for 2023/24 on 22 March 2023 for the full charge of £2,503.58
  3. as well as his partner Mr Pink lives with his adult daughter who does not work
  4. Mr Pink and his partner have assets of less than £10,000.00 and their weekly income totals £340.00 a week
  5. Mr Pink applies for a council tax reduction on 14 April 2023
  6. Mr Pink is entitled to a reduction of forty percent of the Band D charge (Forty percent of £2,503.58 is £1,001.43 or £19.26 a week, less £5.00 for his daughter’s financial contribution)
  7. as he did not apply until 14 April 2023, Mr Pink is not entitled to a reduction until 17 April 2023. He must pay the full council tax for the first 16 days of the year, the reduction he receives is 50 weeks at £14.26 a week or £713.00.
  8. after making a successful application, Mr Pink is sent a reduced demand for the current tax year for £1,790.58.