Council Tax is a tax paid by those who own their own home or rent a property to live in. It is used to fund local government services. How much Council Tax you pay is, of course, decided by the value of your property. But if you’re on a low income, you may be entitled to receive Council Tax Benefit. Council Tax Benefit comes in the form of a rebate from the local government.
If you've recently been made redundant and need to understand your financial position, you can use our free Redundancy Pay Calculator.
It is not only your income which determines how much Council Tax Benefit you might be entitled to, but your savings. This is especially relevant for those who have just been made redundant as they will often receive a redundancy payment, sometimes a large sum. In most circumstances, any redundancy payment you receive will be treated just as if it was savings. If you have savings of more than £16,000, you will not be eligible for Council Tax Benefit at all; if you have savings of more than £6000, your Council Tax Benefit will be reduced.
Applying for Council Tax Benefit
If you have been made redundant, unless you are lucky enough to find new employment straight away, you will have less income than you did before. Your lower income may mean that you are now eligible for Council Tax Benefit, even if you previously were not.
If you are applying for Jobseeker’s Allowance or for Income Support, the initial pack you are given, containing information about the benefits as well as the forms needed to make your claim, will also contain an application form for Council Tax Benefit. Otherwise, you can download a Council Tax Benefit claim form as a PDF file from the Department of Work and Pensions (DWP) website, then print it out and send it in. (Warning! It is 40 pages long so make sure you have plenty of ink and paper for your printer.) Alternatively, you can get one from one of your local government’s offices.
It is important to apply for Council Tax Benefit as quickly as possible; otherwise you could lose out on some of it. If you know that your circumstances are going to change, you do not need to wait for the change to happen before applying. You can apply for Council Tax Benefit up to 13 weeks in advance. So, if you have been given advance notice of your redundancy, you can get your application in early.
Although it is called a rebate, Council Tax Benefit actually comes in the form of a reduction on the Council Tax payments you are required to make each month, rather than a partial return of the money after the fact.
Find out how much statutory redundancy pay you could be entitled to. Enter your details and get an estimate in less than a minute.
Try our Redundancy Pay Calculator free, here on this site →When Your Circumstances Change
If you have applied for and received Council Tax Benefit based on the low income you had after you were made redundant, and then your circumstances change, for example if you start work in a new job, you are required to inform your local council immediately about the change. Your higher income level may mean that you receive less Council Tax Benefit or that you are no longer eligible for it at all. Failing to keep your local council informed in a timely fashion about significant changes in your circumstances is an offence.
Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.
Council Tax Benefit – Conclusion
If you are made redundant, you may need to get used to living in straitened economic circumstances, at least until you find a new job. Applying for all the benefits you’re entitled to is a necessary part of the adjustment process. You’ll find that the savings offered by Council Tax Benefit can be a great help in difficult times.
his employer has offered a redundancy payment split in two. first part
at the end of employment, the second when we vacate the house....can he do this?
surely his redundancy payment shouldn't have conditions on it? he has lived in this house for over 30yrs
Can I get council tax relief
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