Orkney Islands Council
Working together for a better Orkney

Council Tax Reduction

Council Tax Reduction (CTR) was introduced from 1 April 2013 to replace Council Tax Benefit (CTB), which has been abolished by the UK Government as part of its welfare reform programme.

Responsibility for assisting those who need help to pay their Council Tax in Scotland now sits with the Scottish Government and Scottish Local Authorities.

Calculating Entitlement to a Council Tax Reduction

CTR works by comparing the amount of income a person has with the amount that a person needs to live on (their 'applicable amount').  If their income is less than the applicable amount, they may be entitled to a reduction of 100%.

There are three key elements needed to calculate how much Council Tax Reduction an applicant may be entitled to:

  • Their total Council Tax due (net of the contributions others in the household might be expected to make – so called “non-dependant deductions”); 
  • Their income and capital; and 
  • Their ‘applicable amount’, which is the sum representing the needs of the applicant and their family (which varies depending on whether the applicant is single or lives with dependents, whether they have children, a disability, caring commitments, etc).

Income and Savings

If you receive Income Support, Income Based Jobseekers Allowance, or the guarantee element of Pension Credit, you may be eligible for the maximum amount of Council Tax Reduction.  If you don't receive any of these benefits, but have low earnings, you might still qualify for some Council Tax Reduction. But usually, your savings must be less than £16,000.

The Size of Your Household

If you are married, or live together as husband and wife, you will be assessed on your joint income. You might also qualify for a reduction if there's another adult, other than your partner, living in the household.  If you have a joint responsibility to pay the tax with someone other than your partner - perhaps with a brother or sister - you can apply separately for a reduction.

Water and Sewerage Charges

Council Tax Reduction cannot be used to reduce any water or sewerage charges on your bill.

How Council Tax Reduction is Paid

If you successfully apply for Council Tax Reduction, we'll send you a letter telling you how much you’ll receive and when the payments start. The Reduction will be paid straight into your Council Tax account. You'll then be sent an amended bill, telling you how much you still need to pay.

You should tell us about any changes to your circumstances that might affect your entitlement to Council Tax Reduction.

Council Tax Bands E to H - relief from banding increases from 1 April 2017

From 1 April 2017 the Scottish Government has introduced increases in the calculation of Council Tax for properties in Valuation bands E, F, G and H.  In 2017/2018 households affected by this change can apply for Council Tax Reduction on the difference between the rate was charged in 2016/2017 and the increased rate in 2017/2018. To qualify, households must have a net income of less than £25,000 annually (£16,750 for single person households) and have savings of less than £16,000.   

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