How is council tax reduction calculated?

The first step when calculating Council Tax Reduction entitlement is to work out your applicable amount. Your applicable amount is made up of one or more allowances and premiums. It is also dependent on the circumstances of you and your household members.

If your total income (not including disregarded incomes such as child benefit and disability living allowance) is the same or less than your applicable amount, you will be entitled to the maximum amount of Council Tax Reduction payable to you (subject to non-dependant deductions and capital limits).

If your total income (not including disregarded incomes) is more than your applicable amount, you will be able to claim a reduced amount of Council Tax Reduction.

Where your total income is higher than your applicable amount the difference between the two amounts is called excess income. To calculate a Council Tax Reduction award a percentage of your weekly excess income is deducted from your weekly council tax liability - this is called the income taper. You must pay the difference between your council tax reduction entitlement and your council tax charge.

If you live with other adults, depending on your circumstances and those of the other adults, deductions may be made to your council tax reduction award - these are called non-dependant deductions.

Two Child Limit

The scheme makes an allowance for up to two children. This change came into place from 1 April 2019 for new claims and for relevant changes of circumstances. 

A relevant change of circumstances means a child joins your household or your Council Tax Reduction award is reduced to £0.00 for a period of one or more days.

Income Taper

To decide how much Council Tax Reduction should be awarded some of your weekly excess income (explained above) is deducted from your weekly council tax charge.

If your total income (not including disregarded incomes) is higher than your applicable amount your award of Council Tax Reduction is reduced. 

We take 25% or 25p in every £1 of your excess income into account.

Tariff Income from savings

If you have more than £6,000 no tariff income is taken into account.

The maximum amount of capital that can be held remains at £16,000. If you hold more than £16,000 you will not be entitled to any Council Tax Reduction.

Council Tax Reduction capped at Council Tax Band D

The maximum amount of council tax reduction that anybody receives will an amount the same as Council Tax Band D.

The maximum you will receive will depend on your council tax liability but cannot be greater than the capped amount.

View your details on My Hastings

If you have a council tax reduction and or housing benefit claim you can look at the details of your claim, what has been used to calculate the claim and your payments on My Hastings. It only takes a couple of minutes to create an account and then link your claim under the My accounts section and then you can check the details whenever you need to.