Introduction
The UK Government has announced significant updates to the council tax reduction scheme, aiming to expand eligibility and ensure greater financial support for vulnerable groups. The new regulations introduce five key amendments, primarily benefiting pension-age individuals, those receiving specific compensation or disability payments, and British nationals temporarily overseas.
The measures are intended to align the council tax reduction scheme with wider social security reforms and address the evolving needs of UK households facing cost-of-living pressures.
Overview of council tax reduction reforms
The council tax reduction scheme provides financial relief to households struggling with their council tax payments. Recent changes, signed off by the Local Taxation and Pensions Division and the Ministry of Housing, Communities and Local Government, reflect an effort to harmonise regulations with other benefit systems.
Officials have outlined a package of five changes that update the rules governing who can claim and how payments from certain sources are treated. These changes are designed to ensure equity and efficiency across the benefits framework.
Key amendments for disregarded payments
One of the key updates is the expansion of payment types that will be disregarded when calculating eligibility for a council tax reduction. Under the new regulations, payments made through the Armed Forces Lesbian, Gay, Bisexual and Transgender Veterans Financial Recognition Scheme will not affect a claimant’s entitlement. Additionally, compensation payments for miscarriages of justice administered by the Ministry of Justice have been included in the list of disregardable income.
This adjustment ensures that recipients are not penalised when seeking financial redress for wrongful convictions. A further amendment applies to those moving from Scotland to England who continue to receive Adult Disability Allowance under the Scottish Adult Disability Living Allowance Regulations 2025. During transitional periods following relocation, these payments will not impact council tax reduction entitlement.
Adjustments related to international situations
The regulations also make provisions for claimants who are temporarily overseas due to advice or evacuation arranged by the UK Government. In such cases, both working-age and pension-age individuals will be exempt from the requirement to be habitually resident in Great Britain to claim council tax reduction.
This exemption applies for up to six months from the date of official advice or evacuation, ensuring that individuals forced to leave the country in an emergency do not lose access to crucial financial support.
Residency requirements for claimants
Traditionally, claimants have been required to demonstrate habitual residence in Great Britain to qualify for council tax reduction. The revised rules temporarily lift this requirement for specific international
circumstances, offering increased flexibility during periods of crisis. This development is in response to recent situations where global events have resulted in the evacuation or advised departure of British nationals from certain territories.
Temporary absence provisions for pensioners
The new measures also extend support for pension-age individuals who are temporarily absent from their homes in Great Britain. Pensioners who usually reside in the UK will now be permitted to continue receiving council tax reduction for absences of up to 26 weeks.
This provision recognises the particular vulnerabilities faced by older residents and facilitates continuity in financial support during extended trips, medical treatment, or other temporary stays away from their usual address.
Final Summary
These changes to the council tax reduction scheme represent a targeted effort by the UK Government to enhance the fairness and reach of support for eligible households.
By updating disregard rules for specific compensation schemes and disability allowances, and increasing flexibility for claimants affected by international emergencies or temporary absence, the measures aim to provide a more compassionate and consistent safety net, especially for pensioners and those in vulnerable situations.
Individuals seeking further details on these changes or assistance in navigating the application process may find digital tools such as the Pie app useful for ongoing financial guidance.
