Lambeth Council Tax Hardship Fund: How to Apply for DCTSHP

When Lambeth switched to the income-banded Council Tax Support scheme in April 2026, the maximum working-age discount dropped from 100% (for protected groups) to 73.5% under the standard scheme. That leaves at least 26.5% of the council tax liability to pay, even for people with zero earned income, unless separate relief or discretionary hardship support applies. For households already stretched thin, even that minimum can be impossible.

The Discretionary Council Tax Support Hardship Payment (DCTSHP) exists to fill that gap.

What the Hardship Fund Covers

Lambeth allocated £300,000 for the DCTSHP in the 2026/27 financial year. The payment reduces or eliminates the council tax balance that remains after your standard Council Tax Reduction has been applied. It's administered under Section 13A(1)(c) of the Local Government Finance Act 1992, which gives Lambeth the power to reduce anyone's council tax liability to whatever extent it sees fit.

The fund is discretionary — there's no automatic entitlement. Lambeth assesses each application individually based on the severity of your financial hardship.

Who Can Apply

You're eligible if you meet all of these:

• You're currently receiving Council Tax Reduction under Lambeth's working-age scheme
• You're still unable to pay the remaining council tax balance after your CTR discount
• You can demonstrate exceptional financial hardship — not just that money is tight, but that paying the council tax balance would leave you unable to meet essential living costs

Pension-age residents are excluded, since the national prescribed scheme already allows up to 100% support.

How to Apply

Applications go through Lambeth's online DCTSHP form. You'll need:

• Your benefit reference number (starts with the digit 8)
• A detailed income and expenditure breakdown — every source of income and every essential outgoing, including rent, food, utilities, travel, debt repayments
• Bank statements for the most recent two months (all accounts)
• A written explanation of why your circumstances are exceptional

The form requires specifics. "I can't afford to pay" isn't enough. The council wants to see that after meeting your essential living costs, there is genuinely nothing left for the council tax balance.

What Makes a Strong Application

The strongest hardship applications show a clear, documented shortfall. Your monthly income (all sources) minus your essential expenditure (rent or mortgage, food, utilities, childcare, medical costs, minimum debt payments) should leave a deficit or near-zero balance. A clear budget helps Lambeth assess whether paying the remaining council tax would leave you unable to meet essential costs.

Supporting details that help:

• Letters from creditors showing existing debt obligations
• Evidence of recent income loss (redundancy notice, hours reduction letter)
• Medical evidence if health conditions create additional costs
• Any written confirmation that you've sought free debt advice from StepChange, National Debtline, or Citizens Advice

DCTSHP vs Discretionary Housing Payments

Don't confuse the two. DCTSHP covers the gap in your council tax bill. Discretionary Housing Payments (DHP) cover shortfalls in your rent — they're a separate scheme with a separate application. You can apply for both if you need help with both.

Prepare a Complete Application

The Lambeth Council Tax Reduction Guide includes a hardship statement planner that walks through the income-vs-expenditure breakdown the council requires, helping you build the case before you submit.

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