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How Council Tax Support is calculated

Your (and your partner’s) total income is added together in order to calculate your Council Tax Support award. This includes all earned income (such as your wages) and all unearned income (for example Child Tax Credit) or your Universal Credit award.

Claim Council Tax Support

Employed earnings

We can only deduct the following from your gross earnings regardless of what is actually deducted:

  • Income Tax
  • National Insurance contributions
  • half of any pension contributions

We try to use an average of your income. For example, if you’re paid monthly we’ll deduct the above and work out a fair average of your earnings over a period of time. We may choose to exclude higher or lower payslips if these are not representative of your usual average earnings.

We require 2 monthly payslips, 2 four-weekly payslips, 3 fortnightly payslips or 5 weekly payslips. All payslips provided must consecutively follow each other.

If you have just started work, and have not yet received the number of payslips we have asked for, you can provide:

  • one payslip
  • your contract of employment
  • a letter from your employer confirming the number of hours you are due to work each week and your hourly pay, or the number of hours you are due to work each week and your annual salary
  • a Certificate of Earned Income form which must be completed and stamped by your employer. These forms are available on request

You will still need to provide your 2 monthly payslips, 2 four-weekly payslips, 3 fortnightly payslips or 5 weekly payslips once received.

Self-employed earnings

If you are self-employed we will require your self-employed accounts. Your self-employed accounts should be for a recent trading period, for example the most recent financial year, or the last 6 or 12 months.

You will also need to supply evidence of your income and expenses by providing invoices and receipts for the relevant trading period.

We will then work out your profit for the trading period and minus away any Income Tax, National Insurance contributions and half of any pension contributions. The remaining profit is then converted into a weekly figure.

If you have just started self-employment you can:

  • provide a self-employed account for the last 3 months with proof of income and expenses
  • provide a projected self-employed account for 3 months from the start of your self-employment

If you do not have your self-employed accounts already prepared, you can print the self-employed declaration form and complete it as fully as possible.

Please ensure your trading period on the self-employed declaration form does not exceed 52 weeks.

Self employed declaration form (PDF, 156.32 KB)

If you are self-employed you will also need to provide a letter from Her Majesty's Revenue and Customs confirming your Unique Tax Payers Reference Number (UTR Number).

Benefits

If you are in receipt of other welfare benefits these will be added to your claim as they are paid and no amounts will be deducted.

You will need to provide a recent letter from the relevant benefits department to confirm your entitlement.

Disregarded monies

Some incomes are completely disregarded for the calculation of Council Tax Support, for example Child Benefit, Disability Living Allowance and money received from an ex-partner towards Child Maintenance.

Earnings disregards

We disregard a small amount from your earnings if you are working.

These disregards vary depending on your household composition and the number of weekly hours worked by you and/or your partner.

Childcare costs

An amount for childcare costs can be disregarded from your earnings if any of the following apply to you:

  • a lone parent in remunerative work for 16 hours or more
  • a couple where both work at least 16 hours per week
  • a couple where one works at least 16 hours per week and the other is incapacitated, in hospital or in prison

In order to deduct childcare costs from your earnings, the childminder must be one of the following:

  • a registered domiciliary care worker
  • foster carer (but not for their foster child)
  • Ofsted registered
  • someone approved under the Home Care Providers Scheme
  • the local authority (either at or by a school, or by the local authority at any other suitable site)

You will need to provide evidence of your childcare costs. This could be a recent letter from your childminder or a recent agreement/contract.

The proof should also show their Ofsted registration number, or proof of their status if they are not Ofsted registered, for example proof they are approved under the Home Care Providers Scheme.

We can disregard the following:

  • up to £175 per week from your earnings where one child is of the relevant age
  • up to £300 per week from your earnings if there are two or more children of the relevant age

Relevant age means:

  • a child up until the 1st Monday in September following their 15th Birthday
  • a disabled child up until the 1st Monday in September following their 16th Birthday

You must be in receipt of Child Benefit for the child in order for us to deduct any childcare costs for that child from your earnings.

If your earnings are lower than your childcare costs, any remaining balance can be deducted from your Working Tax Credits to reduce your income for Council Tax Support purposes.

Universal Credit

If you are in receipt of Universal Credit your Council Tax Support award will be calculated based on the Universal credit award, plus any ineligible deductions such as debt repayments.

Earned income will be applied as reported within your Universal Credit award for the relevant assessed income period.

Childcare costs will be disregarded through an increase in your Applicable amount up to a maximum amount of £646 per month for one child and £1108 per month for two or more children, if reported within your Universal Credit award.

Eligible Council Tax

Eligible Council Tax is the maximum amount of Council Tax Support we can award you.

If you are under State Pension Age or in receipt of Universal Credit

Eligible Council Tax = 75% of annual Council Tax bill

This means if your annual Council Tax bill is £1000, we can pay you up to £750 Council Tax Support.

If you are State Pension Age or over

Eligible Council Tax = 100% of annual Council Tax bill

This means if your annual Council Tax bill is £1000, we can pay you up to £1000 Council Tax Support.

Your capital Toggle accordion

Capital is anything that has a monetary value, such as land and property, investments and savings, but which is not received on a regular basis or with reference to a specific period, like earnings.

You will not be entitled to Council Tax Support if your (and your partner’s) combined capital exceeds:

  • £10,000.00 if you are under State Pension Age
  • £16,000.00 if you are of State Pension Age or above

Check your State Pension age

The following are some of the most common items that are counted as capital:

  • cash
  • Individual Savings Accounts (ISAs)
  • land
  • lump sums such as redundancy payments, insurance payments and back payments of social security benefits
  • Premium Bonds and Income Bonds
  • properties you or your partner own or jointly own
  • money invested in a business and business assets
  • money held or jointly held in banks, building societies and the Post Office
  • money held or jointly held in any current accounts or pre-paid cards
  • money held in trust
  • money you have borrowed
  • stocks, shares, unit trust holdings, government securities and bonds
  • Tax Exempt Special Savings Accounts (TESSAs)
  • tax refunds
  • TESSA-only ISAs (TOISAs)
  • National Savings Certificate

This is not a full or complete list. Other forms of investments, properties, savings, or anything that has monetary value could be counted as capital.

Your total capital affects your Council Tax Support as follows:

  • total capital of £9,999.99 or less does not affect your Council Tax Support if you are below State Pension Age
  • total capital of £10,000 or less does not affect your Council Tax Support if you are of State Pension Age or above
  • total capital of £10,000 or more means that you cannot get Council Tax Support if you are below State Pension Age
  • total capital of £16,000 or more means that you cannot get Council Tax Support if you are of State Pension Age or above
  • for those who are below State Pension Age, any capital between £6,000.00 and £9,999.99 can affect your Council Tax Support
  • for those who are of State Pension Age or above, any capital between £10,000.01 and £15,999.99 can affect your Council Tax Support

The regulations say we must assume that you earn income from your capital.

The table below shows how much is added to your weekly income depending on how much capital you have; this is only applicable for those who are of State Pension Age or above:

Amount of capital in poundsWeekly amount added to your total weekly income if you are below State Pension AgeWeekly amount added to your total weekly income if you are of State Pension Age or above
£6,000.01 to £6,250.0010
£6,250.01 to £6,500.0020
£6,500.01 to £6,750.0030
£6,750.01 to £7,000.0040
£7,000.01 to £7,250.0050
£7,250.01 to £7,500.0060
£7,500.01 to £7,750.0070
£7,750.01 to £8,000.0080
£8,000.01 to £8,250.0090
£8.250.01 to £8,500.00100
£8,500.01 to £8,750.00110
£8,750.01 to £9,000.00120
£9,000.01 to £9,250.00130
£9,250.01 to £9,500.00140
£9,500.01 to £9,750.00150
£9,750.01 to £10,000.00160
£10,000.01 to £10,250.00171
£10,250.01 to £10,500.00181
£10,500.01 to £10,750.00192
£10,750.01 to £11,000.00202
£11,000.01 to £11,250.00213
£11,250.01 to £11,500.00223
£11,500.01 to £11,750.00234
£11,750.01 to £12,000.00244
£12,000.01 to £12,250.00255
£12,250.01 to £12,500.00265
£12,500.01 to £12,750.00276
£12,750.01 to £13,000.00286
£13,000.01 to £13,250.00297
£13,250.01 to £13,500.00307
£13,500.01 to £13,750.00318
£13,750.01 to £14,000.00328
£14,000.01 to £14,250.00339
£14,250.01 to £14,500.00349
£14,500.01 to £14,750.003510
£14,750.01 to £15,000.003610
£15,000.01 to £15,250.003711
£15,250.01 to £15,500,003811
£15,500.01 to £15,750.003912
£15,750.01 to £15,999.94012

 

Applicable amount Toggle accordion

Calculating Council Tax Support

Council Tax Support is calculated using an applicable amount. This is a part of the means test.

The applicable amount is the amount of money the government believes you (and your partner) need to meet your necessary weekly costs. The actual amount is dependent on the size and circumstances of your family.

We subtract your applicable amount away from your total weekly income, and any remaining income is known as your excess income.

Applicable amounts are set by adding the following:

  • your personal allowance,
  • personal allowance for any children you have
  • any family or disability premium

Check your State Pension age

Non-dependants (people living with you) Toggle accordion

Non-dependants

A non-dependant is the term used to describe anyone who normally resides with you and is not:

  • a joint-tenant
  • a sub-tenant
  • a resident landlord, or a member of the resident landlord’s family
  • someone who lives with you to care for you or your partner, and is employed by a charitable or voluntary body which charges you for the care
  • your child (for whom Child Benefit is in payment)
  • your partner

A non-dependant is someone who normally lives with you such as an adult child, relative or friend and is not liable to pay Council Tax. A non-dependant can be anyone over the age of 16 for whom Child Benefit is no longer in payment.

In most cases, a set amount for each non-dependant is deducted from your maximum Council Tax Support entitlement. This is to reflect the non-dependant’s assumed contribution to your housing costs. Any actual contribution made by the non-dependant towards the Council Tax is ignored. The amount varies according to the age and income of the non-dependant.

The table below allows you to work out how much will be deducted for your non-dependant. If you have more than one non-dependant, more than one deduction will be taken. Deductions are for each non-dependant. Only one non-dependant applies for non-dependant couples but this would be based on their combined income.

Non-dependent deductions for Council Tax Support
Non-dependant’s incomeWeekly amount to be deducted from your eligible Council Tax
Non-dependant aged 18 or over, whose combined weekly income is (inclusive of any earned income used to calculate a Universal Credit award):
Less than £216.99£4.05
£217 to £376.99£8.30
£377 to £468.99£10.40
£469 or more£12.45
Non-dependant who is:
In receipt of Pension Credit (Guarantee Credit or Savings Credit)£0
Aged less than 25, and in receipt of Income Support, Employment Support Allowance Income Related (ESA IR), Jobseekers Allowance Income Based (JSA IB) or the standard allowance and other related elements of Universal Credit calculated on the basis the person does not have any earned income.£0
Aged 25 or over, and in receipt of Income Support, ESA IR or JSA IB£4.05
Aged 18 or over, and in receipt of ESA Contributions Based or JSA Contributions Based£4.05
Aged 18 or over and not economically active (not working, studying nor claiming benefits)£4.05
Non-dependant aged 16 or 17, regardless of their income£0

A non-dependant’s combined weekly income is the total amount of money they have coming in. For example Child Benefit, Child Tax Credit and any earnings will be added together to reach their combined weekly income.

Highest deduction

When we are unable to establish the income of your non-dependant we will apply the Highest Deduction. This is an assumption that your non-dependant’s gross weekly income is £469 or more.

There are certain scenarios in which we do not take a non-dependant deduction. No deduction applies if the non-dependant:

  • has been in hospital for more than 52 weeks
  • is a full-time student, however we could take a deduction from your Council Tax Support in the summer holidays if the student takes up work, unless you or your partner are aged 65 or more
  • is under 18
  • normally lives elsewhere

There is also no non-dependant deduction if the claimant or their partner:

  • is registered blind or is treated as registered blind
  • receives Attendance Allowance
  • receives the care component of Disability Living Allowance

How Council Tax Support is paid Toggle accordion

Council Tax Support award

If you are awarded Council Tax Support, the total amount you are entitled to (up until the end of the financial year) will be credited directly into your Council Tax account. This will reduce your bill, which will reduce the amount you have to pay. A financial year is April to the following March.

If you have paid your Council Tax in full for the year, you may be entitled to a refund for the amount of Council Tax Support being credited into your Council Tax account. Alternatively, you can choose to have the credit carried forward to next year’s Council Tax bill.

If, at any point, your Council Tax Support is either reduced or stopped, we will take the amount you are no longer entitled to back from your Council Tax account. This will increase your bill, which will increase the amount you have to pay.

When your Council Tax Support will end Toggle accordion

Ending entitlement

We will end entitlement to Council Tax Support in these circumstances:

  • Council Tax Support entitlement is reduced to nil, for example by an increase in income
  • Council Tax Support is suspended and you fail to respond to a request for information within 21 days
  • death of the person claiming Council Tax Support
  • moving out of the borough

If at any time your claim is suspended or ended, we will tell you what we have done. You can appeal against our decision to end your claim if you disagree with it.

You must tell us about any changes you think might affect your Council Tax Support. If you don’t, you may receive too much or too little support, which could result in an overpaid amount of Council Tax Support.

Don't wait for us to review your claim

Any changes in your, your partner’s or your household’s circumstances must be notified to us within 21 days of the change.