England council tax reduction rules change April 2026
Town halls across the North will apply fresh national rules to Council Tax Reduction from April, after ministers signed off an update to the prescribed requirements for England. Signed on 13 January by Minister of State Alison McGovern, the regulations were laid before Parliament on 15 January and come into force on 13 February ahead of the 2026/27 year, according to legislation.gov.uk. They apply to schemes made by billing authorities in England.
For residents, the most immediate shift is who passes the habitual residence test. People who left a country following UK government advice to depart or an evacuation, and those arriving through safe and legal humanitarian routes, will be eligible subject to immigration status. A new six‑month window runs from the date the advice or evacuation began, and recipients of Universal Credit are now explicitly covered.
In practical terms, councils from Carlisle to Kirklees will see more recently returned Britons and humanitarian arrivals qualify sooner for support. The Government’s explanatory note describes “further exemptions from the habitual residence test”, a tweak welfare teams have long wanted spelled out clearly for casework.
Rates are uprated too. Non‑dependant deductions-the sums taken off a claimant’s support when another adult lives in the home-rise modestly: the top flat‑rate deduction moves to £15.95 a week (from £15.35), with income‑based deductions increasing from £10.20 to £10.60 and from £12.80 to £13.30. The income thresholds attached to those bands lift to £279 and £485 per week.
Personal allowances used in means‑testing are increased in line with inflation. The single adult allowance rises to £256.00 a week (from £244.40); the couple rate to £383.35 (from £366.00); the child amount to £87.88 (from £84.66); and the family premium to £20.22. An amount disregarded from income increases to £75.65, and the income bands for the alternative maximum reduction are lifted to £289 and £375.
Two sensitive payments will no longer count against support. Awards under the Ministry of Defence’s LGBT Financial Recognition Scheme and compensation for miscarriages of justice are to be disregarded as both income and capital for Council Tax Reduction calculations. In short, receiving recognition or redress will not reduce a household’s help with council tax.
The rules also line up with Scotland’s reforms. Scottish Adult Disability Living Allowance is recognised within England’s framework, including where payment is temporarily paused due to a hospital stay. That matters for people moving from Scotland to the North of England during the transition to new Scottish disability payments, ensuring continuity in disability‑related premiums.
Temporary absence rules for pensioners are tightened and clarified. Where someone was in a country the Government later advised Britons to leave or evacuated, councils can treat up to 26 weeks as a temporary absence from Great Britain for Council Tax Reduction purposes. Outside those circumstances, the general cap for temporary absence is set at 26 weeks.
For Northern councils setting budgets in February and March, the message is practical: update the CTR calculators, staff guidance and resident letters so the new figures apply from 1 April. For households, especially pensioners and recent arrivals, the advice is simple-tell your council about any change in circumstances and, if you receive one of the protected payments, make sure it’s recorded.