Council Tax Reduction Consultation 2026

Overview

A need to review the Council Tax Reduction Scheme 

In December 2025, the Council agreed its Council Tax Reduction scheme for the year 2026/27 for working-age people. It also committed to a comprehensive review of who receives support, how much they get and how to enhance the scheme for the most vulnerable.   

What is Council Tax? 

Council Tax is a property-based tax which all householders (both homeowners and tenants) normally have to pay if they are over 18. 

A full Council Tax bill is based on at least 2 adults living in a home. Spouses and partners who live together are jointly responsible for paying the bill. 

What is the Council Tax Reduction Scheme? 

If you are on a low income, you can apply for Council Tax Reduction. This means that you pay less in Council Tax. 

The Government sets the rules for how much Council Tax Reduction low-income pensioners could get. 

Somerset Council sets the rules for how much Council Tax Reduction working age residents on a low income could get. 

The purpose of this consultation is to ask for your views on possible changes to Council Tax Reduction support for working age residents. 

The support provided for pensioners will not be affected. 

What changes are being considered? 

There are a number of changes we considering for the 2027/28 Council Tax Reduction scheme. The cost of the scheme cannot increase and so the proposals being consulted on reduce support in some areas to pay for changes that will enhance support for the most vulnerable.  

To fund the proposals in Parts 1 and 2 of this consultation, a combination of the proposals in Parts 3 to 8 need to be introduced. 

In Somerset, there are currently 28,569 Council Taxpayers receiving Council Tax Reduction. This costs Somerset Council just over £31 million a year (based on current Council Tax levels). 

When we use the word ‘disregard’ we mean this is something we ignore or don’t take into account when calculating your Council Tax Reduction. 

In this consultation we are asking for views on several proposals. These are: 

• To disregard an amount equivalent to the lower rate of Limited Capability for Work Related Activity (LCWRA) (currently £217.26 a month) when working out a person’s income where they or their partner get the LCW or LCWRA element in their Universal Credit (Part 1) 

• To disregard Transitional Protection elements of Universal Credit as income when working out a person’s income (Part 2) 

• Remove the £25 a week earnings disregard when working out a person’s income (Part 3) 

• Remove the £30 a week income disregard where the home of the claimant includes someone who is disabled (Part 4) 

• Increasing the standard non-dependant deduction from £10 to £15 a week and introducing exemptions to a non-dependant deduction for certain households (Part 5) 

• Reducing the level of support for all working age applicants (Part 6)  

• Restricting support to Band B Council Tax levels (Part 7) 

• Introducing a minimum weekly award level of £5 a week (Part 8) 

• Introducing additional income bands for families with 3 or more children (Part 9) 

Who will this affect?  

The support provided for pensioners will not be affected. 

The proposals would affect working age households in Somerset who receive Council Tax Reduction from 1 April 2027. 

Some other key aspects of the scheme will remain the same: 

• If you have capital of more than £6,000 no discount will be awarded. Any capital less than £6,000 will be ignored. 

• We will continue to protect War Pensioners by disregarding War Pensions or War Disablement pensions in full. 

• We will continue to maintain an Exceptional Hardship scheme which will support people who need additional help, including those who may have their support reduced due to any changes.