The Council is asking for your views on proposed changes to the Council Tax Reduction Scheme (CTRS) for working age claimants effective from April 2026.
The Council Tax Reduction Scheme helps households on a low income by reducing the amount of council tax they must pay. It is a means tested benefit, which consists of two separate schemes:
- A scheme for pension age claimants, which is set by central government, and
- A scheme for working age claimants which is set locally by the Council.
The Council is proposing changes to its scheme for working age claimants in Knowsley and we would like to understand your views on the proposed changes.
Pension age claimants are not affected by the proposals as that scheme continues to be set by central government and eligible Pension age claimants will continue to get up to 100% discount on their Council Tax.
This consultation is a legal requirement and aims to ensure that the Council Tax Reduction Scheme reflects the needs and preferences of our community.
The feedback we receive will help shape the support provided to households in need, ensuring fair and effective distribution of resources.
We encourage everyone, whether they are in receipt of Council Tax Reduction Support or not, to participate and share their thoughts. The consultation will run from Wednesday 19 November to Wednesday 17 December.
The current scheme
Knowsley’s Council Tax Reduction Scheme for working age adults currently supports more than 10,000 households across the Borough and costs the Council approximately £10 million per year.
Currently, the scheme works out an appropriate amount of money, based on national benefit rates, that each household needs to live on. It then looks at how much income the household gets each week.
If a household's income is less than their appropriate amount, they get the maximum 80% discount on their council tax bill. If their income is more than the appropriate amount, they do not get the maximum 80% discount. Instead, 20p in every £1 of ‘extra money’ they have is taken off their council tax discount. This calculation is complicated and can be difficult to understand.
Currently someone on Universal Credit can see frequent but small changes to their income. Under the current Council Tax Reduction Scheme these income changes can trigger a change to their Council Tax Reduction support, which in turn requires a new Council Tax bill to be issued. At the moment someone on Universal Credit who is in receipt of Council Tax Reduction support can receive up to 11 different Council Tax bills a year, making it difficult for them to budget for their Council Tax. This additional work also results in higher administration costs for the Council.
We are proposing to change our Council Tax Reduction Support scheme from 1st April 2026. The proposed changes will:
- Target support to those households who need the most help
- Simplify the rules, making it easier to understand and maximise uptake
- Stabilise support for residents in receipt of Universal Credit
- Reduce administration costs for the Council
What are the proposed changes?
The council is proposing making the following changes to the scheme:
Increase the maximum support from 80% to 84%
The Council is proposing to make this element of the scheme more generous and increase the maximum support available for low income households from 80% discount to 84% discount against their Council Tax bill.
Introduce a ‘cap’ on a household’s assessed Council Tax liability at Band C
Under this proposal any households in receipt of Council Tax Reduction support who live in a Band D to H Council Tax property would have their award ‘capped’ and calculated on the basis of the cost of a Band C Council Tax bill.
Introduce a minimum award value of £3.00
The Council is proposing to introduce a minimum award value of £3 per week and any claims resulting in support of less than £3 per week would not be awarded.
Increase non-dependant deductions from £2 and £5 per week to £4 and £10 per week
A non-dependent is any other adult living in a household. A non-dependent deduction is an amount deducted from a households assessed Council Tax Reduction support to reflect the fact that those additional adults should contribute towards the cost of the council tax for that household. The scheme currently applies 2 different non-dependent deductions, depending on whether the additional adult is employed or not in employment.
The Council has not increased the level of non-dependent deductions since 2013 and is proposing to increase these from £2 to £4 for those not in employment and from £5 to £10 for those who are in employment.
Changes in earnings of less than £3 will not trigger a re-assessment
The current scheme requires any changes in income, up or down and regardless of value, to trigger a re-assessment of Council Tax Reduction support. The Council is proposing to introduce a £3 threshold and if a claimants income changes by less than £3 the change will not be re-assessed. If the income change is more or less than £3 cumulatively throughout the year, the change will be re-assessed at the point it breaches the £3 threshold.
This proposed change will significantly reduce the number of Council Tax bills being issued throughout the year to claimants on Universal Credit.
Introduce an earnings based banded scheme
Under this scheme, household earnings are used to place each household in one of four ‘bands’ with each ‘band’ having a predetermined level of support.
To reflect the different needs of various households, the earnings ‘threshold’ for each band is different dependent on household composition such as single people, couples, and households with children. The proposed bandings are outlined in the table below.
Band |
Award |
Single Adult Households |
Couple Households |
| 1 | 84% |
Households with £0 earnings (Includes households in receipt of benefits with no earnings from paid employment) |
|
| 2 | 64% |
Net earnings of less than £120 per week (plus £20 per child) |
Net earnings of less than £140 per week (plus £20 per child) |
| 3 | 44% |
Net earnings of between £120 and £199.99 per week (plus £20 per child) |
Net earnings of between £140 and £219.99 per week (plus £20 per child) |
| 4 | 20% |
Net earnings of between £200 and £299.99 per week (plus £20 per child) |
Net earnings of between £220 and £319.99 per week (plus £20 per child) |
92% of households currently in receipt of Council Tax Reduction would fall into Band 1 and be awarded the maximum level of support.
Those households whose net weekly earnings are above the Band 4 thresholds (after any child additions) would not be eligible for Council Tax Reduction Support.
To support those moving from Benefits into paid employment the Council is proposing to delay moving those households out of Band 1 until the following financial year to provide time form them to budget accordingly.
Introduce a full council tax discount for residents diagnosed with a terminal illness
In addition to the above changes to the Council Tax Reduction Scheme the Council is proposing to introduce a full Council Tax discount for residents diagnosed with a terminal illness.
What happens next
Once the consultation period ends, all responses will be carefully analysed. The results will be reported to the members of the council, who will consider them when making any necessary adjustments to the Council Tax Reduction Scheme.
A summary of the consultation findings will be published on the Council’s website, and the finalised scheme will be approved by Full Council with the changes taking effect from April 2026.
How to comment
This consultation is open to residents in Knowsley, and we would like to hear your views. To do this please fill in our quick online survey here.
Further information
If you have any questions about this consultation, please email benefits@knowsley.gov.uk