Council tax

3. Discounts, disregards and exemptions

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.

Discounts

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

Disregards

Disregards apply to people living in the property. Some people are disregarded and become invisible for council tax purposes. So, for example, if one of two occupants is disregarded, it will be 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. The different types of disregards are important because of how they affect exemptions (see below).

A person with dementia may be disregarded if they are severely mentally impaired. This applies to anyone who meets all of the following criteria:

  • has a severe impairment of intelligence and social functioning which appears to be permanent
  • has a certificate confirming this impairment from a registered medical practitioner, usually the person’s GP or consultant
  • is entitled to certain disability benefits - the most common qualifying benefits are Attendance allowance (lower or higher rate), Disability living allowance (higher or middle rate care components) and Personal independence payment (lower or higher 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 as set out above, and is therefore disregarded for council tax. That means Gwen is treated as living alone, even though she isn’t. They will get the 25% ‘single person’s discount’.

Exemptions

Exemptions apply to properties, rather than people. An exemption means the whole property is exempt 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 there is no payment due.

Example: Nancy 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 signed her form under the severe mental impairment rules. This means she is disregarded and her house is now exempt. She pays no council tax.

It is important to know that not all disregards mean the property will be exempt from council tax. Some disregards mean the person doesn’t count for council tax purposes, but the property is treated as if it is empty and will be charged an empty property rate (see ‘Empty properties’ below). An example of this type of disregard would be if a carer who meets certain criteria lives at the property.

Living with a carer

A spouse or partner will not get a discount or disregard as a result of being a carer. If someone lives with and cares for a partner who meets the severe mental impairment criteria (and no one else lives in the property), the spouse or partner will be charged council tax as a single person as if they lived alone, as in the example of Tony and Gwen shown above.

However, some other carers can be disregarded for council tax purposes if they fall into one of two groups. The first group of carers who are disregarded for council tax purposes must meet all the following criteria:

  • care for at least 35 hours a week
  • live in the same property as the person they care for
  • are not the partner of the person they care for
  • are not 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 (highest rate of the care component), Personal independence payment (either rate of the daily living component), Attendance allowance (higher rate) or Constant attendance allowance. The person being cared for may fulfil all of the severe mental impairment criteria, but this is not essential for the carer to claim. The second group of carers who are disregarded for council tax purposes must meet all the following criteria:

  • provide care or support on behalf of a local authority, government department or charity, or provide care through an introduction by a charity, where the person being cared for is the carer’s employer
  • are employed to care for the person for at least 24 hours a week
  • are paid no more than £44 per week
  • live where the care is given. Someone who falls into either of these carer groups is disregarded for council tax purposes. However, the type of disregard they receive is different to someone who is severely mentally impaired. This type of disregard doesn’t mean that the property will be exempt for council tax purposes. The person will pay a reduced council tax bill but they will pay something.

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 Jo, his daughter. Jo is also disregarded for council tax purposes because she is recognised by the local authority as his carer (see the first group of criteria above). Therefore, because both Peter and Jo are disregarded, this property is being treated as if it is empty under council tax rules. This means they are eligible for a reduced council tax bill – see ‘Empty properties’.

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