Council Tax Benefit Replaced by Council Tax Support: What Changed

What Happened to Council Tax Benefit

Council Tax Benefit (CTB) was a national, means-tested benefit administered by the Department for Work and Pensions. It ran from 1993 until 31 March 2013, when the Welfare Reform Act 2012 and the Local Government Finance Act 2012 abolished it. In its place, each billing authority in England was required to design and adopt its own localised Council Tax Reduction (CTR) scheme — also called Council Tax Support (CTS).

The change meant that help with council tax stopped being a single national benefit and became over 300 separate local schemes, each with its own rules, income limits, and award structures.

What Changed in Practice

Under the old Council Tax Benefit:

• Rules were the same everywhere in England
• Maximum support was 100% of the bill for those on the lowest incomes
• The capital limit was £16,000
• Every change in income triggered a recalculation
• DWP administered it alongside Housing Benefit

Under the new localised schemes:

• Each council sets its own working-age rules
• Some councils cap support below 100%
• Capital limits vary by council (Dorset uses £6,000; some others kept £16,000)
• Pension-age rules remain national and prescribed — councils cannot reduce pensioner entitlement
• Councils administer it themselves, separately from DWP benefits

The central government grant to fund the replacement was cut by around 10% from day one, forcing many councils to introduce a minimum payment — requiring even the lowest-income working-age households to pay something toward their council tax.

How Dorset's Scheme Works Now

Dorset Council replaced the traditional means-tested calculation with an income-banded model from 1 April 2024. Instead of the complex "applicable amount minus income times taper rate" formula, Dorset uses a grid: your household type (single, couple, family with 1/2/3+ children) and your net weekly income determine a fixed discount percentage — 100%, 80%, 60%, 40%, 20%, or 0%.

The banded approach has one major advantage over the old system: small fluctuations in earnings do not trigger constant rebilling. Your discount stays the same as long as your income remains within the same band. Under the old CTB system, a £10 weekly wage increase would immediately reduce your award, potentially mid-month.

Dorset's scheme retains 100% maximum support at Band 1, but the working-age capital ceiling is £6,000 — significantly stricter than the old £16,000 CTB limit. If you have savings above £6,000 (unless you receive Income Support, income-based JSA, or income-related ESA), you do not qualify.

What You Need to Do

If you were on Council Tax Benefit before April 2013 and have been continuously receiving Council Tax Support since, your claim should have rolled over automatically. If you moved or stopped claiming, check with Dorset Council whether you need a new application. If your circumstances changed while your claim is open, report the change to the council rather than assuming you must start a new claim.

If you are claiming Universal Credit, remember that UC replaced several legacy benefits (Income Support, income-based JSA, income-related ESA, Housing Benefit) but it did not replace Council Tax Reduction. You must apply for CTR separately through Dorset Council — the DWP does not do it for you.

The Dorset Council Tax Reduction guide covers the current income bands, application steps, evidence requirements, and backdating rules for the 2026/27 scheme.

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