Council Tax Reduction in Scotland

Council Tax Reduction is a means-tested scheme that can lower your council tax bill in Scotland by up to 100%. The rules are set by the Scottish Government and your local council runs it, so you apply to the council. You can get it if you receive certain benefits, or if you are on a low income with savings under £16,000.

Who can get Council Tax Reduction?

To get any help through the scheme, you must:

• live in the property as your main home
• be named on the council tax bill, which means you are liable to pay it
• meet the residence rules, which include having the right to reside here

If you get certain benefits, you can apply. These include Universal Credit, the guarantee credit part of Pension Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance.

If you do not get one of those benefits, you can still apply if you have a low income and capital (savings and some kinds of property) below £16,000. If you are part of a couple, both your savings count.

If another adult who is not your partner lives with you, such as a grown-up son or daughter, your reduction may be smaller because they are expected to contribute. This is called a non-dependant deduction. Students have special rules.

Three schemes, one application

Citizens Advice Scotland explains there are three schemes, and the council gives you whichever takes the most off your bill:

• Council Tax Reduction: the main scheme, based on your benefits or your income and savings
• Council Tax bands E to H relief: for homes in bands E to H, where your income and savings are below set limits
• Second Adult Rebate: if you live with another adult who is not your partner, is 18 or over, has a low income, does not pay rent, and is not liable for the council tax. Here the council looks at their income, not yours

You cannot get Second Adult Rebate and Council Tax Reduction together. You get whichever is higher.

How do you apply?

Apply to your local council. Depending on the council, you can apply online, on a paper form or by phone.

• Universal Credit: the Department for Work and Pensions (DWP) sends information about your claim to the council, which may use it to work out Council Tax Reduction automatically. Check with the council whether you need to apply separately.
• Other DWP benefits: you should be asked if you want to claim, but you still need to apply to the council.
• Couples: one of you applies for both. If one of you has reached State Pension age, that person should apply so the pension-age rules are used, although the working-age rules still apply if either of you gets Universal Credit or certain other benefits.
• Moving home: you can apply up to 8 weeks before you become liable for council tax at the new address.

The council may ask for evidence, such as payslips or savings statements, usually within a month. Do not hold back your application while you gather it. If you need more time, ask in writing.

Can Council Tax Reduction be backdated?

Yes, in some situations. Under the working-age rules, the Council Tax Reduction (Scotland) Regulations 2021, your claim can be treated as made earlier than the day you applied if, for example:

• you apply within one month of claiming Universal Credit or another qualifying benefit, in which case it can start from the first day of that benefit
• you apply within one month of first becoming liable for council tax at your home
• you apply within one month of separating from a partner who was getting Council Tax Reduction

On top of that, if you had continuous good cause for not applying sooner, your claim can be backdated by up to 6 months before you applied (regulation 26). You will need to explain why you could not apply earlier, and Citizens Advice Scotland suggests getting help with this. Different rules apply if you have reached State Pension age, so ask your council.

What other discounts can cut your bill?

Council Tax Reduction depends on income. These do not:

• Single person discount: 25% off if you are the only adult counted as living in your home. Some adults are not counted, including full-time students, school leavers under 20, care leavers under 26, some apprentices, live-in carers and people with a severe mental impairment.
• Disability reduction: if your home has been adapted for a disabled person, you pay the rate for the band below. In band A, you pay five-ninths of the band A rate.
• Severe mental impairment: someone with significant cognitive difficulties may bring a discount or an exemption. A doctor needs to sign a form. There is more on this in debt and your mental health.
• Students: a home where everyone is a full-time student does not pay council tax.

Citizens Advice Scotland’s free Check My Council Tax tool can help you see what might apply. If your bill shows a discount you do not think you should have, tell the council within 21 days, or you could face a penalty later.

How does Council Tax Reduction affect arrears?

Council Tax Reduction lowers your bill from the date your entitlement starts. It does not wipe out arrears from before that date, although backdating can lower the bills for an earlier period.

• While you wait for a decision, tell the council’s collection team, in writing if you can, that you have applied. Keep a copy.
• Keep paying what your bill shows, even if you are challenging a decision. Missed payments can quickly lead to a summary warrant, which adds 10% to the arrears and lets sheriff officers (court officers who enforce debts) take action. See council tax arrears in Scotland.
• Old arrears do not simply lapse. Councils have much longer than most creditors to recover council tax. See how long council tax debt can be chased.

Council tax arrears can be included in formal Scottish debt solutions such as the Debt Arrangement Scheme (DAS) and trust deeds, but your ongoing bill cannot. Sequestration (bankruptcy) and informal plans are other options. Each works differently and some have costs: a trust deed, for example, has fees, affects your credit rating for 6 years and puts your name on the public Register of Insolvencies. An adviser needs to look at your whole situation first, and free debt advice is available.

What if you disagree with the decision?

1. Ask for a review. Write to the council within 2 months of the decision, saying what you think is wrong. Someone who was not involved in the first decision looks at it again.
2. Appeal to the tribunal. If you still disagree, you can appeal to the First-tier Tribunal for Scotland (Local Taxation Chamber), which is independent of the council. You must appeal within 42 days of being told the outcome of the review. If the council has not replied within 2 months of your review request, you can appeal within 42 days of the end of that 2 months.
3. Complain. If you were treated unfairly or given poor service, use the council’s complaints procedure, then the Scottish Public Services Ombudsman.

You must keep paying the amount on your bill while any of this is going on.

Official sources

• mygov.scot: Council Tax discounts, exemptions and reductions
• Citizens Advice Scotland: check if you can get Council Tax Reduction
• Citizens Advice Scotland: Council Tax Reduction guides, including how and when to apply and challenging a decision
• Citizens Advice Scotland: Council Tax, including discounts and Second Adult Rebate
• The Council Tax Reduction (Scotland) Regulations 2021