About the letter we send you
We will send you a letter whenever we:
- award Council Tax Reduction
- change your award
- stop your award
This page explains how much help you can get and why.
How we work out your Council Tax Reduction for pensioners
We always work out Council Tax Reduction as a weekly amount.
If you live with a partner, we add their income to yours.
The information below shows how we work out your reduction.
Step 1: Work out your weekly income
We add together:
- your earnings (if you work)
- any other income, such as pensions or benefits
- any income we assume from savings or capital
This gives us your weekly income for benefit purposes.
Step 2: Compare your income to what you need to live on
We then take away your applicable amount. This is the amount the law says you and your family need to live on.
What is left is called your excess income.
Step 3: Work out how much you need to pay
The law says you must pay 20% of your excess income towards your Council Tax. This is called your expected contribution.
We take this amount off the weekly Council Tax charge on your bill.
Step 4: Work out your Council Tax Reduction
- If there is money left after we do this, that is your Council Tax Reduction.
- If other adults live with you (called non‑dependants), we may reduce this amount.
If the result is £0 or less, it means the law says you have enough income to pay your Council Tax and you will not get a reduction.
If you get Pension Guarantee Credit
If you receive Pension Guarantee Credit, you will usually get the maximum Council Tax Reduction, unless we have to make deductions for non dependants.
Earned income
If you are employed, we look at your average pay before tax.
From this, we take off:
- Tax you pay
- National Insurance
- half of any pension contributions
If you are self‑employed, we look at your business income and take off:
- allowed business expenses
- Tax and National Insurance
- half of any pension contributions
We may ignore some of your earnings. This depends on:
- the size of your family
- whether you are disabled
- how many hours you work each week
Unearned income
This is money you receive that is not from work. It can include:
- benefits from the Department for Work and Pensions and His Majesty’s Revenue and Customs, such as Child Benefit, Universal Credit, State Pension, Personal Independence Payment and Carer’s Allowance
- private pensions
- child maintenance
- income from boarders or tenants
We do not count:
- Personal Independence Payment
- Disability Living Allowance
- Attendance Allowance
- war pensions
- some income from boarders or sub‑tenants
Assumed income from capital and savings
We look at savings and capital, such as:
- bank and savings accounts
- investments
- land or property
Some items are ignored.
If your savings or capital are over £10,000, we assume you get £1 a week income for every £500 (or part of £500) above this amount.
If you have more than £16,000, you cannot get Council Tax Reduction.
Applicable amount
This is the amount the government says you and your family need each week for normal living costs.
It includes:
- a basic amount based on your age and whether you are single or a couple
- extra amounts (called premiums) if you have additional needs, such as:
- dependent children
- a disability
- caring responsibilities
Non‑dependant deductions
If another adult lives with you who is not your partner or a dependent child, we may reduce your Council Tax Reduction.
This could be:
- an adult son or daughter
- another relative
- a friend
We assume these adults help with household costs.
The amount we deduct depends on their income and situation, not yours.
How we work out Council Tax Reduction (working age customers)
The amount of reduction you can get depends on:
- your income
- who lives with you
You may get 100%, 50%, 25% or 10% off your Council Tax.
The higher your income, the lower the reduction.
We compare your income to our local income bands.
When working out your weekly income, we ignore:
- £25 a week from earnings if you or your partner work
- £30 a week from all income if you, your partner or a dependent child is disabled
- income from Carer’s Allowance, Child Benefit, child maintenance, war pensions and war disablement pensions
- the housing element of Universal Credit
If you get:
- Income Support
- income based Jobseeker’s Allowance
- income related Employment and Support Allowance
you will get 100% Council Tax Reduction.
We reduce your reduction by £10 a week for each non-dependant adult living with you.
If your home is in Council Tax band E, F, G or H, we work out your reduction as if it were band D.
Changes you must tell us about
You must tell us straight away if there are changes, including:
- changes to your or your partner’s income, savings or benefits
- you or someone in your home starts work
- changes to the income of other adults in your home
- you are away from home for more than:
- 4 weeks outside the UK, or
- 13 weeks within the UK
- someone moves in or out
- a boarder or sub‑tenant moves in or out, or their rent changes
This is not a full list. If you are not sure, please ask us.
You can report changes in your circumstances on Report a change in circumstances – Benefits.
The sooner you tell us, the sooner we can update your award and help you manage your money.
If you think the decision is wrong
If you want more information or think our decision is wrong, contact us within one month of the date of your letter.
You can appeal in writing within one month by emailing benefits@somerset.gov.uk. Please tell us which decision you are appealing and why.
We will look at the decision again. If we cannot change it, an independent tribunal will consider your appeal.