Council Tax Reduction - income when the pension-age rules are used

If you or your partner has reached State Pension age

Council Tax Reduction (CTR) is calculated differently depending on your age and your circumstances.

If you or your partner has reached State Pension age, the pension-age CTR rules will usually apply. You can check your State Pension age on GOV.UK.  

However, even if one of you has reached State Pension age, the working-age CTR rules will still apply if you or your partner gets:  

• Universal Credit  

• income-based Jobseekers Allowance (JSA)  

• income-related Employment and Support Allowance (ESA)  

• Income Support.  

You can find out more about how income is treated under the working-age CTR rules.  

If you’re part of a couple and only one of you has reached State Pension age, the person who has reached State Pension age should apply for CTR if you want your application to be assessed under the pension-age rules.  

How your Council Tax Reduction is worked out 

If the pension-age CTR rules apply to you, the way the local council works out your CTR will depend on if you or your partner gets Pension Credit.  

There are different rules if you or your partner:  

• gets the guarantee part of Pension Credit 

• gets the savings part of Pension Credit, but not the guarantee part 

• doesn't get Pension Credit.  

The rules about calculating your income for CTR are complicated. It can be difficult to work this out manually. You can use an online benefits calculator to check how much CTR you might be entitled to. You can find an online benefits calculator on GOV.UK. 

To find out more about CTR, contact your local council. Your local council website might have a tool that you can use to calculate how much CTR you can get. You can find your local council on mygov.scot.

If you get the guarantee part of Pension Credit

Your income and capital is ignored and you'll be entitled to maximum Council Tax Reduction (CTR) if you or your partner gets:

• the guarantee part of Pension Credit

• both the guarantee part and the savings part.

There might be a deduction for any non-dependants who live in your household. 

If you get the savings part of pension credit but not the guarantee part

If you or your partner gets the savings part of Pension Credit but not the guarantee part, the pension service will need to give your local council the figure for your income that they used to calculate your savings credit.  

The local council will use this figure to work out how much Council Tax Reduction (CTR) you’re entitled to.  

If you have capital 

If you and your partner have capital over £16,000, you cannot get CTR. Your capital includes any savings.

Capital under £10,000 is ignored.  

If you have between £10,000 and £16,000, the local council will calculate income from your capital. This is called tariff income.    

Tariff income is counted as a weekly income of £1 for every £500, or part of £500, over £10,000. 

If you don't get Pension Credit

If neither you nor your partner gets Pension Credit, the local council will look at your income, savings and capital to work out if you are entitled to a Council Tax Reduction (CTR).  

How your income is worked out 

The local council will calculate your income as a weekly amount. 

Your income includes your State Retirement Pension.  

If you live with a partner then your income includes your partner's income.  

The local council will work out your 'applicable amount'. The applicable amount depends on your household, including whether you live with a partner or have dependents. There might be a deduction for any non-dependents from the amount of CTR you can get. 

If your income is the same, or less than, your applicable amount then you'll get maximum CTR. 

If your income is more than your applicable amount, the council will: 

• Step 1 - work out the difference between your applicable amount and your income 

• Step 2 - work out what 20% of the difference figure at step 1 is 

• Step 3 - take this 20% amount from your maximum CTR, minus any deduction for non-dependents. 

The result is the amount of CTR you are entitled to. 

If you have capital

If you and your partner have capital over £16,000, you cannot get CTR. Your capital includes any savings.

Capital under £10,000 is ignored.  

If you have between £10,000 and £16,000, the local council will calculate income from your capital. This is called tariff income.   

Tariff income is counted as a weekly income of £1 for every £500, or part of £500, over £10,000. 

Water and sewerage charges

You might still have to pay water and sewerage charges, even if you get maximum Council Tax Reduction. Read more about help paying for water and sewerage.