Correspondence

Council Tax information letter 1/2026: Local Council Tax Support schemes for 2026-27

Published 16 January 2026

Applies to England

To: Local authorities in England – For the attention of the Council Tax section

From: Local Taxation and Pensions Division, Ministry of Housing, Communities and Local Government (council.tax@communities.gov.uk)

Date: 16 January 2026

Dear Colleagues

The Council Tax Reduction Schemes (Prescribed Requirements) (England) (Amendment) Regulations 2026

This letter summarises the provisions of the Council Tax Reduction Schemes (Prescribed Requirements) (England) (Amendment) Regulations 2026 (“the Regulations”) which were laid before Parliament on 15 January 2026 and come into force on 13 February 2026. See the Regulations and Explanatory Memorandum.

Background 

As in previous years, the government has amended the Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012 to ensure that pension age Local Council Tax Support (LCTS) schemes are updated in line with changes in the wider benefits system. Billing authorities must ensure that the requirements of the updated regulations are reflected in their LCTS schemes for 2026-27 by the statutory deadline of 11 March 2026.

Uprating 

Reflecting the latest annual review of benefits and pension rates announced by the Department for Work and Pensions on 27 November 2025, the Regulations uprate the following amounts which must be included in pension age LCTS schemes from 2026-27: 

• non-dependant deductions (adjustments made to the maximum amount of reduction an applicant can receive to take account of non-dependant adults living in the property)
• applicable amounts (the amount against which a person’s income is compared to determine the amount of reduction to which they are entitled)
• premiums (additional amounts of income which persons with particular characteristics – such as those with disabilities – can have without their eligibility being affected)
• the amount which may be disregarded where the applicant is the parent of a specified student under the age of 25 and makes an eligible contribution to their maintenance
• the alternative maximum council tax reduction, which allows an applicant whose income or savings exceed the usual eligibility threshold to obtain up to a 25 per cent reduction in their bill where they share their home with one or more adults who do not pay rent, are not their partner, and who have a combined weekly income below the specified amount

Income and capital disregards 

Consistent with the wider benefits system, the Regulations make changes so that a pension age person’s claim is not affected by the receipt of certain payments.

This includes:   

• adding a new disregard so that any payments made through the Armed Forces Lesbian, Gay, Bisexual and Transgender Veterans Financial Recognition Scheme does not affect entitlement to a reduction
• adding a new disregard so that Miscarriage of Justice Compensation payments administered by Ministry of Justice do not affect entitlement to a reduction
• adding a new disregard so that Adult Disability Allowance payments made under Scottish Adult Disability Living Allowance Regulations 2025 do not affect entitlement to a reduction where a recipient receives them for a transitional period after moving to England from Scotland

The Regulations also includes two measures to make it easier for persons to receive a council tax reduction where they are in a country or territory in respect of which the government advised British nationals to leave, or arranged evacuation:

• removing, for up to 6 months from the date of the advice or evacuation, the requirement for both working age and pension age claimants to be habitually resident in Great Britain before a reduction can be claimed
• allowing a pension age person who normally resides in Great Britain to receive support if they are temporarily absent from home for up to 26 weeks

We hope that you find this helpful.

Should you have any queries about the Regulations, please contact the Department at: council.tax@communities.gov.uk.  

Local Taxation and Pensions Division
Ministry of Housing, Communities and Local Government