Soaring energy bills and an overall rise in the cost of living is hitting households hard, especially those on the lowest incomes. What’s more, in April council tax is due to go up by as much as 5% for some households in England, and the energy price cap will increase yet again.
In an effort to soften the blow, in February the government announced a one-off £150 council tax rebate that will apply to millions of households. This is part of a package of support to help households with the rising cost of living. Here’s what it means for you.
Who is the council tax rebate for?
Households that are in council tax bands A to D will get a £150 council tax rebate. This amounts to 20 million households in England, or four out of every five.
Council tax bands are based on the value of your property when it was assessed, and this helps decide how much council tax you pay.
In England, if you don’t pay council tax because you get local council tax support, you will also be eligible for the rebate if your household is in bands A to D. The same applies if you get a council tax single person discount when you live alone.
Is it for the whole of the UK?
Council tax is a devolved issue, and each country will get funding to put their own measures in place. But the £150 rebate has been matched in Scotland and Wales through similar schemes. In Scotland, 73% of households are expected to receive this support. Northern Ireland has yet to set out how it will use its funding.
If you live in England or Wales and aren’t sure what your council tax band is, you can find out through the government website. If you’re in Scotland, you can use the Scottish Assessors website. Otherwise, check your council tax bill or contact your local council.
It’s not just for homeowners
According to the government, 95% of rented properties in England will receive the rebate. So if you rent and are responsible for paying the council tax, the rebate applies to you as well.
But this also means that if council tax is included in your rent and your landlord pays the bill, there is no guarantee that any rebate would be passed on to you by your landlord. And renters in houses in multiple occupation (HMO) that fall into council tax bands E to H are unlikely to be eligible for the rebate either.
» MORE: How council tax works
What if your household isn’t in bands A to D?
You may still receive the rebate or other help if you’re outside bands A to D.
If you’re in Wales or Scotland, whatever band your household is in, if you get a discount on your council tax through a council tax reduction scheme, you will receive the £150 rebate.
In England, local councils have been given a discretionary fund totalling £144 million for vulnerable households on low incomes in bands E to H who aren’t eligible for the rebate. How this will work will depend on the local council, but you may need to apply to receive money from this fund.
It’s thought that over 4.5 million households are not in tax bands A to D. Although these are higher-value properties, some occupants may be on low incomes.
Who won’t get the council tax rebate?
You won’t get a £150 rebate on a council tax bill for an empty home or a second property with no permanent resident. While households in bands E to H in England won’t be eligible, people who are vulnerable or on a low income may get support from the discretionary local authority fund.
If you are in England and don’t pay council tax because you are exempt, you’re unlikely to receive a rebate. This includes full-time student households and halls of residence, which don’t have to pay council tax. Whether other support is available is down to the local authority and how it uses its discretionary fund.
If you live in Armed Forces accommodation, you won’t get a rebate through this scheme. The Ministry of Defence will manage support with the cost of living.
How will you get the rebate?
Your local council will pay you the money and should contact you to explain how it will work. It’s only one payment per household, no matter how many people live there or pay council tax.
The payment will usually go to the account that the council tax is paid from. If an eligible household is exempt from council tax, it will go to the person who would have otherwise paid it.
You’ll get it quicker by direct debit
You will receive the money automatically and most likely faster if you pay your council tax by direct debit, as it can be paid directly into your bank account.
The government is encouraging people who don’t pay by direct debit to sign up in time. You should be able to set this up online through your local council’s website or by phone.
If you don’t or can’t pay your council tax by direct debit, and don’t want to start, you can still receive the rebate. Your council should get in touch to confirm and ask for your bank details. Check it is your local council before giving out any bank account details over the phone.
While direct debits take a few days to be set up, the government says that rebates will be paid as soon as possible from early April.
Do you need to repay the £150 council tax rebate?
You won’t have to repay the £150 rebate. It’s not a loan, it’s money off your council tax bill in the form of a rebate.
The council tax rebate won’t affect any benefits you receive and it won’t be taxed.
» MORE: How to weather the energy price rise
What other council tax reductions are there?
Apart from the rebate, if you have a low income or claim some benefits you may be able to get help with your council tax through the council tax reduction scheme. This also applies if someone in your household is disabled or severely mentally impaired.
The discount you’re eligible for depends on where you live and your circumstances. Among other factors, your income, including savings and pension, who you live with, and if you’re receiving any other benefits will come into it.
You can check if you qualify for a council tax discount through your local council’s website, or via the government website if you’re in England and Wales or Scotland.
» MORE: What to do if you can’t pay your energy bills
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