Discounts, disregards and exemptions on council tax

Some people will be eligible for discounts, disregards and exemptions on their council tax. All of these terms have different meanings, so it’s important to know the difference.

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What's the difference between discounts, disregards, and exemptions?

Discounts

Certain people will get a discount and will therefore pay a reduced rate of council tax. There are a few different types of discount available. The most common example is that anyone living on their own, or treated as living on their own (see ‘Disregards’ below), is entitled to a 25% reduction on their bill. This is called the ‘single person’s discount’.

Disregards

Disregards may apply to people living in the property. People who are disregarded are not counted for council tax purposes. For example, if two people are living together and one is disregarded, it will be charged as if the other person lives alone, and they will get a 25% single person’s discount on their council tax.

There are different types of disregards based on the reasons for them. These different types are important because of how they affect exemptions (see ‘Exemptions’ below).

Severe mental impairment

Anyone can be disregarded if they are classed as ‘severely mentally impaired’. The legal definition of ‘severe mental impairment’ is broad and can be open to interpretation. It does not depend on someone having a diagnosis of dementia or losing mental capacity. It applies to anyone who meets all of the following criteria:

  • They have a severe impairment of intelligence and social functioning which appears to be permanent.
  • They have a certificate confirming this impairment from a registered medical practitioner, usually the person’s GP or consultant.
  • They are entitled to certain disability benefits (but they don’t have to actually be receiving them).

The most common qualifying benefits are:

  • Attendance allowance
  • Disability living allowance (higher or middle rate care components)
  • Personal independence payment (either rate of the daily living component).

Many people with dementia meet all three criteria, so are disregarded under the severe mental impairment rules.

  • Example: Tony and Gwen are married. Tony meets the ‘severely mentally impaired’ criteria and has applied to the council, so he is disregarded for council tax. That means Gwen is treated as living alone, even though she is living with Tony. They will get a 25% reduction on their bill. Their income and savings won’t affect this. However, if they have a low enough income they may be entitled to additional council tax support.

However, if the person who is recognised as being severely mentally impaired lives with two or more adults, there will usually be no reduction in the overall council tax bill on this basis.

A severe mental impairment disregard application form will be available from your local council (see Other resources). Make sure it is the correct form – unlike some other application forms, it should not ask for details of income or savings.

Different medical professionals may have different views about when a person qualifies as severely mentally impaired. If your GP is unwilling to sign a certificate confirming severe mental impairment you could ask a consultant or another GP at your practice. Medical professionals cannot legally charge for this service.

Exemptions

Exemptions apply to properties, not people. An exemption means the whole property is excluded from council tax and there is nothing to pay. For example, when the only people occupying the property are disregarded because they are severely mentally impaired, a ‘class U exemption’ applies, meaning no payment is due.

  • Example: Priya had been claiming the single person’s discount on her council tax bill because she lived alone. After her diagnosis of vascular dementia she successfully claimed Attendance allowance. Her GP then certified that she is severely mentally impaired. This means she is disregarded and her house is now exempt. No council tax has to be paid on her property.

If all the people living in a property are disregarded but not all under the severe mental impairment criteria, the property won’t be exempt from council tax. Instead, the property will be treated as if it is empty and council tax may still be charged. See ‘Empty properties’ below.

Living with a carer

A spouse or partner of a person with dementia will not get a discount or disregard simply as a result of being a carer. As long as there is no one else counted as an adult living in the property, someone living with and caring for a partner who meets the severe mental impairment criteria will get a ‘single person’s discount’ on their council tax.

However, some other carers and care workers can be disregarded for council tax purposes if they fall into one of two groups. In either group, the carer can be disregarded even if the person with dementia does not meet the severe mental impairment criteria.

Which carers and care workers are disregarded for council tax purposes?

The first group of carers who are disregarded for council tax purposes must meet all the following criteria. They must:

  • care for at least 35 hours a week
  • live in the same property as the person they care for
  • not be the partner of the person they care for
  • not be the parent of the person they care for, if the person cared for is aged under 18.

In addition, the person being cared for must be entitled to one of the following benefits:

  • Disability living allowance (middle or highest rate of the care component)
  • Personal independence payment (either rate of the daily living component)
  • Attendance allowance
  • Constant attendance allowance
  • Armed Forces independence payment.

The second group of carers who are disregarded for council tax purposes must meet all the following criteria. They must:

  • provide care or support on behalf of a local authority, government department or charity, OR provide care through an introduction by a charity if the person with dementia is the carer’s employer
  • be employed to care for the person for at least 24 hours a week
  • be paid no more than £44 per week
  • live where they provide care.

A carer who is in either of these groups is treated as a disregard. This type of disregard doesn’t mean that the property will be exempt for council tax purposes, but there should be a reduced council tax bill.

  • Example: Peter has Alzheimer’s disease and is disregarded for council tax purposes under the severe mental impairment rules. He lives in a house with Lina, his daughter. Lina is also disregarded for council tax purposes because she is recognised by the local authority as his carer (see group 1 of the criteria list). Therefore, because both Peter and Lina are disregarded, this property is being treated as if no one is living there under council tax rules. This means they are eligible for a reduced council tax bill – see ‘Empty properties’ below.

More than one person in the same property can count as a carer, including where caring responsibilities are being shared.

Empty properties

Empty properties aren’t usually exempt from council tax but the council tax bill may be reduced by the local authority.

However, there are some situations when a property is left unoccupied and council tax is not charged, such as:

  • someone with dementia who has moved into hospital or a care home, or
  • someone who has gone to provide care for a person with dementia.

Most properties that are unoccupied for two years or more don’t qualify for a discount. They may even face an increase in council tax, depending on the local council.

If all the people living in a property are disregarded, but no exemption applies, the property will be treated as if no one is living there. Under these circumstances, the property would usually incur a charge of 50% of the full council tax. The local council will provide details of charges for the property.

Under localised support schemes, many local authorities have changed the rules for how these exemptions apply, depending on why the property is empty. 

Council tax reductions for people with disabilities

It is sometimes possible to claim a reduction on the council tax bill if someone living in the property is assessed as being substantially and permanently disabled, and requires special facilities to meet their needs.

This could include:

  • a room that is mainly used by the person who is disabled
  • an extra bathroom or kitchen
  • space inside the home so that a person can move around in a wheelchair.

If this is the case, the bill will be reduced to the rate of the band below the one the property is in. For example, someone living in a band C property would be charged the rate for the cheaper band B property. Those with band A properties (the lowest band) will have their bills reduced by one-sixth.

This reduction can be applied in addition to other discounts, disregards and exemptions.

Backdating for discounts, disregards and exemptions

Even if a discount, disregard or exemption wasn’t applied for right away, it can be backdated to when it should have first applied. You don’t need to give a reason why it was not originally applied for. However, you will need to prove that the criteria for an exemption or discount applied at the time.

Some councils will backdate the discount, disregard or exemption to the date council tax began (April 1993) or when the person first became entitled, whichever is later. However, some councils try to use the Limitations Act (1980), which restricts backdating to a maximum of six years from the date of requesting it.

A few councils also try to limit the discount, disregard or exemption to the date it is requested or to the start of the financial year in which it is requested. They are not allowed to do this.

If the council tries to limit the backdating in this way, first try to resolve the issue with them. If this doesn’t work, contact the Valuation Tribunal to appeal (see Other resources). You must do this within two months of the council’s decision.

Appeals

If an application for a discount, disregard or exemption is refused, and you are unhappy with the decision, you can make an appeal to your local authority. If this is refused, you have a further right of appeal to the Valuation Tribunal in England or Wales. This must be done within two months of receiving the decision.

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