Council tax reduction and state pension

Tiina33

I turned 66 last October and got my state pension and also some pension credit to bring it up to the amount the government said I needed to live on-£201-05 a week.  I also got 100% council tax reduction.  Last week I got two letters from the DWP, one saying that my state pension is going up to £815.40 every four weeks from this month and the other saying that, owing to this, my pension credit would be stopped. This increase will take me to £203-85 a week, so £2-85 above what the government says I need to live on. I phoned the council tax office as I am really worried I may lose  all my council tax reduction because of this increase and because of the loss of pension credit and thus may have to pay over £20 a week council tax. I have been reading about the 'applicable amount' of income and council tax reduction and don't understand it. Could someone possibly explain it to me? Could I end up paying £20 a week council tax or would the council have to only charge me the amount that would leave me with the £201-05 a week which I am told I need to live on, namely £2-85 a week council tax? I have no income other than the state pension and have less than £6000 in savings. The council tax office told me it would be 6 to 8 weeks for them to let me know and the stress is killing me. 

Robbie64

You won't need to pay £20 per week (I'm assuming this is the weekly equivalent of Council Tax for your area). As you are pension age, you will have any Council Tax Reduction calculated under pension-age rules, which is basically:

1. Your income per week

2. less your "needs allowance" or "applicable amount" each week (this is the amount of Pension Credit that you would get if you had no income)

3. the difference is multiplied by 20% and this is what you will have to pay each week.

In your case this would be 57p per week Council Tax to pay. This assumes you live alone and therefore no non-dependant deduction applies.

sheramber

KxMx said:

The threshold for Pension credit is also due to rise in April, for 2024-25 £218.15 will be the weekly standard minimum guarantee for a single person.

https://www.gov.uk/government/publications/proposed-benefit-and-pension-rates-2024-to-2025/proposed-benefit-and-pension-rates-2024-to-2025#pension-credit

So if your state pension is £203.05 weekly then you should still qualify for PC and full CTR. 

The state pension amount will go up in April due to  the triple lock increase.

As the OP is on the full amount of £203 .85 her pension will increase to 

New State Pension	Rates 2023/24	Rates 2024/25
Full rate	203.85	221.20

HillStreetBlues

They really need to get their act together sending out letter like that.

The threshold for PC always rises at the same percentage rate as the state pensions does.
So a person on just state pension that claims PC will always remain on PC unless their circumstances change.

Edit, incorrect info.

sheramber

HillStreetBlues said:

They really need to get their act together sending out letter like that.

The threshold for PC always rises at the same percentage rate as the state pensions does.
So a person on just state pension that claims PC will always remain on PC unless their circumstances change.

the OP 's stete pension has been recalculated to the full amount £203.85  and willmincrease to £221.20 so will still be above the Pension Credit limit.

The letter is correct.

HillStreetBlues

sheramber said:

HillStreetBlues said:

They really need to get their act together sending out letter like that.

The threshold for PC always rises at the same percentage rate as the state pensions does.
So a person on just state pension that claims PC will always remain on PC unless their circumstances change.

the OP 's stete pension has been recalculated to the full amount £203.85  and willmincrease to £221.20 so will still be above the Pension Credit limit.

The letter is correct.

You are correct, I read other post that talked about April.

KxMx

I've deleted my posts to avoid confusion. 

Tiina33

Thank you to everyone who has replied. 
Robbie64-yes, for my area the band A weekly payment is roughly about £20, though this could go up in April.  Yes, I live alone. 57 p a week to pay would not be a problem at all. In April when the state pension goes up, I assume that the amount of money the government says I need to live on/applicable amount will also rise so that I wouldn't suddenly have to pay a lot more on council tax? 

Robbie64

Tiina33 said:

Thank you to everyone who has replied. 
Robbie64-yes, for my area the band A weekly payment is roughly about £20, though this could go up in April.  Yes, I live alone. 57 p a week to pay would not be a problem at all. In April when the state pension goes up, I assume that the amount of money the government says I need to live on/applicable amount will also rise so that I wouldn't suddenly have to pay a lot more on council tax? 

Yes, when benefit rates increase in April your applicable amount will change along with the amount of State Pension you receive. This will be:

State Pension: £221.20

Applicable Amount: £218.15

Difference: £3.05

x20%

To pay: 61p (i.e. a 4p increase)