Council Tax Reduction Scheme Review 2026
Walsall Council is reviewing its Council Tax Reduction Scheme and would like to hear your views.
Council Tax Reduction helps people on low incomes pay their council tax. The scheme for working-age residents was introduced in 2022.
Since then, there have been changes to benefits, household incomes and the cost of living. We have also seen legal changes affecting how some Universal Credit payments should be treated. As a result, we need to review the scheme to make sure it remains fair, easy to understand and financially sustainable.
No decisions have been made yet. We are asking for your views before any final decision is taken.
The 16 September 2026 Cabinet Report outlines options for a revised Local Council Tax Scheme.
Three options are being considered
Option 1: Keep the Current Scheme
This option would keep the current income-banded scheme with only a small change to how one part of Universal Credit is treated.
Advantages
- Minimal change for most people
- Simple to introduce
Disadvantages
- Does not fully address legal risks
- Support may continue to reduce over time for some households
- May require further discretionary support payments in the future.
Option 2: Earned income only with a maximum award of 70%
This option would only use earned income when assessing support. It would also introduce a £10 weekly non-dependant deduction where appropriate. To keep costs affordable, the maximum reduction available would reduce from 75% to 70%.
Advantages
- Reduces legal risks linked to Universal Credit
- Simpler to administer
Disadvantages
- Some of the lowest-income households could receive less support because of the reduction in the maximum award.
Option 3: Earned income only with a maximum award of 75%
This is the council's preferred option.
This option would only use earned income when assessing support, keep the maximum reduction at 75%, and introduce a flat-rate £10 weekly non-dependant deduction where appropriate.
A non-dependant is an adult who lives in the household but is not the claimant or their partner.
Advantages
- Retains the maximum 75% reduction for households on the lowest incomes
- Reduces legal risks
- Easier to understand and administer
- Creates a fairer balance between support and household contribution.
For example, under the current scheme, a household could receive the maximum reduction even when several other adults live in the property and may have their own incomes. The proposed £10 weekly deduction helps ensure that other adults make a reasonable contribution towards council tax costs.
Disadvantages
- Some households with non-dependents may receive less support than they do now.
Why is Option 3 the Preferred Option?
The Council believes Option 3 provides the best balance between:
- Protecting support for low-income households.
- Making the scheme fairer.
- Reducing legal risks.
- Keeping the scheme simple and affordable.
Information looking at Council Tax Reduction options by household scenarios and non-depandant deductions.
Summary of options
| Feature | Option 1 Current Scheme |
Option 2 Earnings Only (70% Maximum Support) |
Option 3 Earnings Only (75% Maximum Support) |
|---|---|---|---|
| How support is calculated | Based on earnings, Universal Credit and other relevant income | Based on earnings only | Based on earnings only |
| Maximum Council Tax Reduction | 75% | 70% | 75% |
| Non-dependent deduction | Current rules and exemptions remain | Flat-rate £10 per week for non-exempt households with non-dependants | Flat-rate £10 per week for all working-age households with non-dependants |
| Estimated impact on working-age households | Existing levels of support continue | Many households without earnings would receive more support, but around 600 households would no longer qualify | Many households without earnings would receive more support, but around 600 households would no longer qualify |
| Impact on households in work | No significant change | Some working households may receive less support | Some working households may receive less support |
| Impact on households receiving Universal Credit only | Current support levels continue | Many could receive increased support because Universal Credit income would no longer be considered | Many could receive increased support because Universal Credit income would no longer be considered |
| Key advantage | No change to current arrangements | Simpler scheme and greater support for many households with no earnings | Retains the current maximum 75% award while simplifying the scheme |
| Key consideration | Does not address concerns about including Universal Credit elements in calculations | Lower maximum support and some households lose entitlement | Removal of all non-dependent deduction exemptions may reduce support for some households |
Have your say
Feedback gathered in the survey along with other information will be used to inform the final decision. The closing date for responses is 21 October 2026.
If you (or anyone you know) needs this information in an alternative format in order to have your / their say, i.e. Easy Read, large text, audio, or a community language, please email consultations@walsall.gov.uk or call 01922 650000 and we will work with you to meet your / their needs.