Council Tax reduction in Scotland: 2018-2019

1. Introduction

The Council Tax Reduction (CTR) scheme provides low income households with a reduction in their Council Tax liability. The reduction can be any proportion of the liability, up to and including 100 per cent(i.e. the household has their Council Tax liability reduced to £0).

CTR data is reported quarterly. This publication provides the most recent quarterly data for the number of CTR recipients and the weekly income forgone. It also provides more detailed analysis of additional characteristics and weekly awards for March 2019 CTR data.

The Scottish Government introduced CTR on 1^st April 2013 to replace Council Tax Benefit (CTB). CTB had been the responsibility of the Department for Work and Pensions (DWP) until it was abolished by the UK Welfare Reform Act 2012. Until 1^st April 2017, entitlement to CTR in Scotland replicated, as far as possible, previous entitlement to CTB. In 2017 the scheme was changed to increase the child element within the scheme by 25 per cent.

Wider changes also occurred to Council Tax in Scotland in 2017. Council Tax had been frozen between 2008-09 and 2016-17 in line with an agreement reached between the Scottish Government and COSLA. At the end of this period the 2017-18 and 2018-19 Local Government Finance settlements included agreement between the Scottish Government and local government for locally determined Council Tax increases to be capped at 3 per cent. In addition, the multipliers for dwellings in Council Tax bands E to H were changed and a new CTR relief was established for low to middle-income households in properties affected by the changes.

1.1 How CTR awards are calculated

Entitlement to CTR and the amount awarded is based on the status and income of the applicant and their household. Figure 1 shows the process an application goes through to calculate whether CTR should be awarded and, if so, how much.

Figure 1: Process for calculating CTR awards

Note: This is a simplified version, not accounting for capital rules, non-dependant deductions and second adult rebate.

Figure 2: Illustration of CTR Income Assessment 2018-19