This blog answers the question “How Much Savings Can You Have And Still Claim Council Tax Benefits?” Pensioners and working age claimants are considered separately for applying the limit to the amount of savings that disqualify a taxpayer from getting council tax benefits. For pensioners on Guaranteed Pension Credit, savings do not affect council tax benefits calculation and for those on State Pension Credit, the minimum level of savings permissible is £10,000.

How Much Savings Can You Have And Still Claim Council Tax Benefits?

You can have only £6000 of savings which don’t affect your claim for council tax benefits. With savings in excess of £6000, your benefits will be reduced by the value of your capital tariff income (an amount in proportion with your excess savings). If you are on Guaranteed Pension Credit as a pensioner, you can have savings in excess of £16,000 and still claim council tax reduction.

For ordinary taxpayers savings of more than £16,000 mean that you cannot claim any council tax discounts at all. Also for every £250 in savings beyond £6000, council tax adds £1 to your income (mentioned as capital tariff income). 

So this increase in your level of income can accumulate to significantly reduce the council tax benefits you can claim. The Council Tax Reduction calculation for your account each year reflects changes in savings.

On the other hand the minimum amount of saving taxpayers on State Pension Credit can have and still claim council tax benefits is £10000.

Items counted as savings include 

  • Cash savings
  • Current Account
  • Money in a bank, or building-society account
  • Money in Savings Schemes
  • National Savings Certificates
  • Premium Bonds
  • Stocks, Bonds and Shares
  • Property owned

Can I choose to conceal my savings or transfer them somewhere else?

No, there is no untraceable way to conceal your savings or to get rid of them to escape crossing the £6000 (minimum) limit for it not affecting your council tax reduction calculation. 

Some ways are to turn off your bank account’s overdraft protection and to put aside money for a deposit fund to buy a house. Other similar measures or investments in buying items such as cars, putting aside money to renovate your property or spending on medical bills could take the money off your savings.

Every financial transaction has an electronic record and can be traced to your bank account so it is not at all advisable to hide your savings to reduce them (below £16000 or £6000) 

The record of all your savings is stored with your council and changing the status of any bonds, investments or property with the intention of committing tax fraud will be caught (and you will have to pay the misstated value of council tax in full in your next bill)

What is the Council Care and Support Plan and does this benefit depend on the level of savings I have?

A care and support plan mentions :

  • The type of support you need
  • How this care will be given
  • How much money your council will spend for your care plan

In order to qualify for the Council Care and Support plan your personal savings must be less than £23,250

The Council Care and Support Plan helps you to pay for (part of) your health care or that of someone else living with you, by providing financial assistance. This program is in addition to regional home care services and is designed to help people receiving care remain independent for as long as possible. 

These individuals may have a cognitive or physical disability or a behavioral disorder. They need assistance with personal care, household tasks and the use of community resources so that they can remain in their community longer.

The caregiver mentioned in the plan may be a spouse, family member, neighbor or friend who provides free care. The person receiving care must be assessed as needing Level 2, 3 or 4 care while living at home. This may include a person with a disability, a person with a life-threatening illness, and any other person requiring care and supervision for periods longer than 90 days.

Beginning with the 2018 tax year, a tax filer can claim a flat credit of £1,400 per year for care provided without charge.

This credit is not income-tested, it only has a ceiling on the amount of savings you can have.. This means that you can get the credit even if you do not have taxable income. The care and support plan may cover expenses you incur as a primary caregiver, including shopping, transportation, outings and respite care.

Who is eligible to claim the Personal Budget under the plan and what conditions apply to the care recipient?

You can also claim the support given in this Council Care and Support Plan (and benefit from the funds allocated in its personal budget) for someone else.  In this case the care recipient must :

  •  reside in the local council
  •  reside in an area under the jurisdiction of a regional health authority
  •  reside in a private home (i.e. not a group home, foster home, hospital, personal care home, supportive housing or on a reserve)
  •  be assessed as having care requirements equivalent to a level 2 or higher (see application form)
  •  Designate only one primary caregiver to claim this credit.   

To be eligible for receiving the Council Care and Support Plan the primary caregiver must:

  •  reside in the local council
  • provide care for more than 90 days;
  •  personally provide care or supervision to the care recipient without reward or compensation of any kind
  •  not be the spouse or common-law partner of a person who receives remuneration or reward for providing care to an eligible care recipient.  

I was claiming Pension Credit or Housing Benefit before 15 May 2019. Am I affected by the changes to couples’ benefits?

If your circumstances have changed it could affect your council tax reduction claim. These changes include:

  • A change of address to a different council
  • Going abroad for more than 4 weeks
  • A change in the level of savings you have
  • If you stop claiming a council tax benefit that helps you qualify for State Pension Credit or Housing Benefit
  • Getting separated from your spouse and sometime later again remarrying them

In the above-mentioned changes to your circumstances, you will have to claim Universal Credit instead of State Pension Credit or Housing Benefit. These circumstances except the change in your level of savings will still keep you eligible for Guaranteed Pension Credit if you are eligible for it.

Conclusion

This blog post answered the question “How Much Savings Can You Have And Still Claim Council Tax Benefits?” You should not have more than £6000 (£10000 for pensioners on State Pension Credit) in savings to be able to claim council tax benefits. Between £6000 and £16000, there is a narrow window of upto £10000 more in savings, which takes you to the status of not being able to claim any council tax cuts (so it is better to keep the total value of your savings close to or under £6000)

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

Frequently Asked Questions (FAQs) : How Much Savings Can You Have and Still Claim Council Tax Benefits?

Do I qualify for a council tax reduction if the non dependants living with me are a couple?

Council Tax only considers one of these non dependants in the tax discount, this is the higher deduction (and doesn’t count the other partner)

If both partners are working, council tax adds both of their incomes and calculates your tax reduction based on this sum

By partner or couple, council tax means:

  • Someone you’re married to (who can also be of the same sex)
  • A civil partner
  • Someone you live with as a civil partner
  • Someone you live with as if you are married to them.

What is Bereavement Support Payment?

The bereavement support payment is money that you might be able to claim if your husband, spouse or civil partner died after 6th April 2017

There are two rates of bereavement support payment:

  • The first option is that you could get 2500, followed by a further 18 monthly payments of 100
  • If you’re responsible for a child under the age of 20, the second option applies and you could get 3500 followed by a further 18 monthly payments of 350

You can claim the Bereavement Support Payment under the following conditions:

  • The bereavement happened on or after 6th April 2017
  • You were under state pension age when your spouse or civil partner died
  • Your partner paid National Insurance Contributions for at least 25 weeks in any single tax year since 1975
  • You were resident in the UK at the time of the death of your partner

I am in the armed forces and based overseas, do I qualify for any council tax relief?

The Council Tax Relief Scheme (CTR) provides financial support to those Regular and Relief service personnel who are liable to pay council tax on private property while serving overseas in designated operational areas. This scheme is a need based financial support fund run by the Ministry of Justice, UK.

Citations

Section 24 Care Act 2014

The Bereavement Support Payment Regulations 2017

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