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Council Tax Reduction Changes

Council Tax Reduction Changes from 1st April 2018

The Local Council Tax Reduction (CTR) scheme for 2018/2019 for working aged claimants has been changed. The changes to the CTR scheme have been brought in due to a combination of factors, including: the government transferring responsibility for the scheme to Local Authorities from 2013, continuing major reductions in government grant funding towards the scheme, and the extreme financial challenges faced by the council.

The following changes will be implemented from April 2018

Self Employed People

For all self employed people that have been gainfully self-employed for more than 1 year from the 1st April 2018 they will be subject to a minimum income floor (MIF) based on the national living wage. This is will be set as below:

  • Lone Parents – 16 hours a week at the National Living Wage less the national tax and NI applied to a self employed person
  • All others – 35 hours a week at the National Living Wage less the national tax and NI applied to a self employed person

How the minimum income floor is calculated?

A minimum income floor will be applied in the calculation of the CTR scheme if the income from your self-employment is less than 35 hours x the hourly National Living Wage.

The Benefits Department will use that amount in the calculation of income for reduction purposes. From this figure a deduction of estimated tax, national insurance and half a pension contribution (if being paid) will be used, as if estimating the income of an ordinary employed person.

Non Dependant Deductions

From the 1st April 2018, for all working age claims, there is a change to the non-dependant deduction that is applied to a claim if there is an adult or adult child living as part of the household.

For non-dependants who work and if the claimant is NOT excluded from having a deduction taken from their claim the deduction will be a flat rate of £10.00 a week.

The deduction will start from the 1st April 2018 on existing cases and new cases from there on.

Page last updated: 26/10/2018