How we calculate Council Tax Reduction
We calculate Council Tax Reduction (CTR) for those on Universal Credit according to the Earned Income figures within the Universal Credit award.
The bandings for 2025 to 2026, from 1 April 2025 are:
| Level | Weekly Earnings | Proportion of Council Tax bill payable | Proportion of Council Tax bill reduced, i.e. not payable |
|---|---|---|---|
| 1 | £0.00 to £89.94 | 18% | 82% maximum |
| 2 | £89.95 to £128.49 | 40% | 60% |
| 3 | £128.50 to £167.04 | 60% | 40% |
| 4 | £167.05 to £218.44 | 80% | 20% |
| 5 | £218.45 to £321.24 | 90% | 10% |
| 6 | £321.25 plus | 100% | No reduction - not eligible for CTR |
The bandings for 2024 to 2025 were:
| Level | Weekly Earnings | Proportion of Council Tax bill payable | Proportion of Council Tax bill reduced, i.e. not payable |
|---|---|---|---|
| 1 | £0.00 to £84.29 | 18% | 82% maximum |
| 2 | £84.30 to £120.42 | 40% | 60% |
| 3 | £120.43 to £156.55 | 60% | 40% |
| 4 | £156.56 to £204.72 | 80% | 20% |
| 5 | £204.73 to £301.07 | 90% | 10% |
| 6 | £301.08 plus | 100% | No reduction - not eligible for CTR |
When the earned income figure(s) on your Universal Credit award changes, your Council Tax Reduction (CTR) entitlement will be recalculated accordingly.
If the Universal Credit award lists your capital as above £6000 you will not qualify for any Council Tax Reduction.
To work out your weekly earned income amount, add the earning(s) figures listed in the breakdown of your Universal Credit entitlement together, multiply that figure by 12 months and divide it by 52 weeks.