Do You Have To Pay Council Tax If You’re On Benefits?

This blog answers the question “Do You Have To Pay Council Tax if You’re on Benefits?” It looks at the kinds of benefits offered to residents of UK Councils and considers that they are temporary in nature.So Council Tax is payable by everyone whether they are on benefits or not.

Do You Have To Pay Council Tax If You’re On Benefits?

Yes, everyone who owns a property has to pay council tax under UK  law, regardless of whether they are on benefits or not.

Being on benefits such as Income Support, Working tax credit and Child tax credit does not affect your council tax entitlement. This entitlement is calculated based on the tax band your property lies in.

The benefits being received are catered to match the needs of parents, jobseekers and retired persons depending on their financial circumstances. Council tax payments are compulsory for all homeowners and cannot be reduced or exempt if you are on benefits.

One form benefits can take are tax credits, which might reduce the actual council tax bill slightly. Council tax discounts or benefits are applicable for the duration of time (or tax year) in which the citizen’s circumstances enable him/her to claim the credit. So benefits are not permanent but the annual payments of your council tax bill will go on until you are the owner of the property.

Does having a disability affect my liability to pay council tax?

Yes indeed, if you or someone who lives with you has a disability they can avail a council tax exemption or discount. Through the Disabled Band Reduction scheme, your property will be moved to a band lower than the one it is in currently (bands move from high to low in a descending order alphabetically, C is lower than D and D is lower than E). Getting a bill for a property in a lower band will mean lesser charges.

To avail of this scheme, you will need to prove that you have a larger property to cater for the needs of the disabled resident (and so are eligible to pay more council tax, than if the resident or residents of the property were normal). This larger size of property includes space for moving a wheelchair and an extra bathroom, kitchen, etc used to care for the disabled resident. This person with a disability may also be a child.

Similarly, council tax discounts of up to 100% are available for severely impaired property owners or residents

Do I still pay council tax if I have been declared bankrupt?

If your council tax arrears exceed £5000, your council tax arrears will be written off by a Direct Relief Order (DRO) A DRO freezes your debt and interest repayments for 12 months. If your financial situation hasn’t improved at the end of this period all your debt will be written off. This option of getting a Direct Relief Order is only available if your debt is under £30000 and you are ineligible for it if you own property

If your debt is more than £30000 and your creditors have made sure that there is no way to recover debts from you. Under bankruptcy proceedings, you are first summoned to court and then your account is passed on to solicitors who will send you a statutory demand (this gives you a period of 21 days to pay back the full amount you owe)

Next if you are unable to settle this statutory demand HMRC will present a petition for bankruptcy or liquidation to your council court. The court will then make a bankruptcy order

The following financial penalties apply when you are declared bankrupt:

  • Your home could be sold to recover your debts
  • Your bank accounts could be frozen
  • You may not be able to obtain credit exceeding £500
  • The official receiver will control you spending for the next three years
  • You will also no longer control your assets, and the official receiver will decide which ones if any, you can keep in your possession

HMRC will only petition for bankruptcy as a last resort if all other ways of making you repay your debt fail. As long as you are in the status of bankruptcy you will be exempt from paying council tax.

Do I have to pay council tax if my property is severely damaged by fire?

Yes you can avail a council tax discount of up to 100% of the amount of your bill (for upto 12 months/1 year) if you can send full details of the damage and evidence in the form of photographs and reports of the incident.

You will also need to prove that your insurance company will not cover the council tax to be paid for the damaged property. You must include details of your income and where you choose to spend it. Council tax will also need evidence of what you have already done to cover your council tax bill.

To qualify for a council tax exemption under Article 13 A they property must be completely uninhabitable in its current state due to the effect of destruction from the fire to the housing structure including the floor or walls. The monetary value of this loss to your property resulting from the fire should also be calculated correctly and should include invoices of work carried out to fix the damage.

The Council tax reduction (of 50%-100% of your bill amount) will defer your payments for a period of 12 months, until your property has undergone full repairs and is habitable again. Council tax needs to be informed immediately of any fire related damages that have severely damaged the housing structure so that the tax discount can be applied as soon as possible.

If the property has been damaged so badly that it is no longer capable of being repaired without very significant reconstruction the Listing Officers may delete the band and the owner will not pay any council tax. These alterations classify the property as being “truly derelict”

So if the damage is severe the old property will cease to exist. Any new housing build in its place will be allotted a council tax band by the Listing Officers once it is complete and occupied.

If you feel that your property is in the condition of uneconomic repair you must add evidence such as :

  • History of the occupation of the property
  • Any future plans for the occupation of the property
  • A schedule of the repair work being undertaken
  • An estimate of the repair costs and the cost of work required on the property to render it habitable
  • Photographic evidence of the damages to the residence and therefore the extent of further repairs required

This information should be send to the Valuation Office Agency which will decide whether your property’s rateable value has changed or not

If I am living alone in my property or am residing with all severely mentally impaired adults can I be fully exempt from council tax?

Yes, if you are living alone on your property and are certified as being severely mentally impaired, you will be able to claim a 100% reduction in council tax (also if the other adults in your household are classified as severely mentally impaired or are full time students). 

If you are severely mentally impaired and the other adults in your household are disregarded in this tax reduction you will get a 50% reduction on your council tax bill.

If you are living with someone who is severely mentally impaired and are the only 2 adults in the household or the other occupants of your property can be “disregarded” you can claim a 25% council tax discount on your bill. You can apply for this discount here 

What is the difference between the council tax discounts available to persons above 60 years who are on benefits and to those who are not?

Claiming benefits such as the Income based Jobseekers allowance also changes the status of Pension Age taxpayers to working age (despite being over 60 or 70 years old) and prevents them from getting State Pension Credit. So if you are over 70 and still get working age benefits or income support, you may only be entitled to a very small reduction in your tax bill.

Only if your conditions entitle you to claim Guaranteed Pension Credit, can income from benefits such as Universal Credit and Income Support be overlooked when granting you a council tax reduction.

Are there any success stories of people who have received the PIP or DLA benefits?

Here are some of success stories of people who hve received the PIP or DLA benefits:

Example 1:

Adam is a university student who had to undergo dialysis before receiving a kidney transplant.

Adam applied for the Personal Independence Payment . Based on the information provided by the doctor on the Personal Independence Payment application form, he was eligible for the PIP for the time he was on dialysis, which was essential therapy for at least 14 hours per week.

As Adam has a low taxable income and his parents help pay for his food, clothing and accommodation throughout the year, his parents can claim any unused tax credit.

Example 2:

Lisa is a single parent. Her son, Nicholas, needs insulin therapy.

Lisa has applied for the DLA for her son. Thanks to the information provided by the doctor on the Disability Living Allowance application form, Nicholas is now eligible for this tax credit because he cannot monitor and adjust his own dosage.

Lisa is eligible to claim this tax credit, which includes a supplement for those under the age of 18 at the end of the year.

Example 3:

Cheryl and Christie have been together for 30 years.

Two years ago, Cheryl noticed that Christie was slower than before. Christie had to take time to recover after each walk. In addition, Cheryl noticed that Christie could only focus on one subject for a short period of time, even though she had the mental functions necessary for daily life.

Christie applied for the Disability Living Allowance. As a result of the information provided by the doctor on the DLA application form, she now qualifies for the tax credit because she falls into the cumulative effect of substantial limitations category.

Since Christie has a low taxable income, Cheryl can claim any unused portion of the tax credit.

Example 4:

Evelyne is the carer for her mother, Joan, who lives with her.

For many years, Joan has been able to manage on her own despite the progressive nature of her condition. Gradually, her condition deteriorated, making it difficult for her to walk, dress and feed herself.

Evelyne applied for a DLA for her mother. As a result of the information provided by the doctor on the DLA application form, Joan now qualifies for the Disability Living Allowance because she falls into the cumulative effect of severe limitations category. Joan requires constant care and supervision.

Since Joan has a low taxable income and her daughter helps pay for her food, clothing and shelter year-round, Evelyn can claim any unused portion of the tax credit.

Example 5:

Simon is a teacher and Rex is his guide dog.

Last year, Simon had a car accident that caused him to lose his sight. During his recovery, he was given Rex to help him when he had to leave his home.

Simon applied for the Personal Independence Payment. Thanks to the information provided by the doctor on the PIP application form, he is now eligible for the tax credit because he is a blind person.

Because he is eligible for the PIP, Simon may also be eligible for other government programs for people with disabilities. Simon can now claim eligible medical expenses, such as the cost of care for Rex.

Example 6:

Olga lives alone.

Last year, Olga had to have an upper limb amputated. She now has a carer who feeds her and helps her with personal tasks.

Olga applied for the Personal Independence Payment. Because of the information provided by the doctor on the PIP application form, she is now eligible for the tax credit because she is unable to feed herself.

Example 7:

Marie and Joe are both retired.

Ten years ago, Marie fell off a ladder while washing her windows and injured her right leg. She now has to use a wheelchair to get around outside the house.

Marie applied for the DLA. Because of the information provided by the doctor on the DLA application form, she is now eligible for the tax credit because she has a lot of difficulty walking.

Mary has received a significant tax refund for the past ten years, since her disability began ten years ago and the doctor was able to certify this information.


This blog post addressed the question “Do you have to pay council tax if you’re on benefits?” Council tax is a tax on domestic property which is unaffected by the taxpayer’s benefits status. 

The benefits may partially offset the actual amount of the council tax bill you receive or help you in paying it but they don’t provide the basis for a total exemption.Only the Guaranteed Pension Benefit (which is offered for a limited time) gives a 100% reduction in council tax to pension age claimants even if they are on benefits.

Please feel free to comment on the content or ask any questions in the comments section below :

Frequently Asked Questions (FAQs) : Do You Have To Pay Council Tax If You’re On Benefits?

I’m trying to sell my house and will struggle to pay council tax. What can I do?

If the property remains empty for more than 12 months and is being offered for sale, it will be exempted from council tax if you can prove that it is being marketed for sale.

Council tax will be charged after a maximum period of 36 months since the last occupation of the property, has gone by.

I have an issue with the roads, who can I report it to?

Your county council is responsible for the roads. You need to contact them on their email address or telephone number to report this problem. 

You may also write a letter to your Council by mail on their postal address like this one for Harborough Council: 

Harborough District Council

The Symington Building

Adam and Eve Street

Market Harborough

Leicestershire,LE16 7AG

Why do I have to pay my council tax on certain dates?

You can choose a payment date and can make payments at any time as long as it reaches the Council by the due date specified on the bill.

The monthly payments are meant to create a schedule of 10 payments for the annual bill and must be strictly followed. If you miss your monthly payment, you need to inform council tax immediately or you will be held legally responsible after 7 days of the due date.


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