Somerset Council Tax Reduction Scheme Changes: 2025 Cuts, Judicial Review, and 2027 Proposals

Somerset Council's Council Tax Reduction scheme has been through two years of cuts that hit working-age residents hard. The changes adopted in December 2024 — taking effect in April 2025 and continuing into 2026/27 — represent the most significant restructuring since council tax support was localised in 2013. And there's a High Court challenge arguing the scheme discriminates against disabled residents.

What Changed in April 2025

The council declared a financial emergency in November 2023. By December 2024, Full Council adopted a reformed working-age CTR scheme that took effect on 1 April 2025:

Discount bands were cut:

• Band 2: 75% → 50%
• Band 3: 40% → 25%
• Band 4: 25% → 10%
• Band 1 stayed at 100%

Backdating slashed: from 12 months to 3 months, requiring continuous good cause throughout

Band D property cap introduced: CTR for properties in Bands E–H is now calculated as if the property were Band D. Residents pay the full difference.

Flat non-dependant deduction: a standard £10/week deduction for each adult living in the household, replacing the variable scale used previously

For context on the impact: the council's own data shows Exceptional Hardship Scheme awards surged by 136% after the changes, with the average award rising 27.5% to £562.78. That's a direct measure of how many households were pushed into crisis.

The 2026/27 Scheme

The current financial year (1 April 2026 to 31 March 2027) maintains the same structural rules from 2025/26. The only adjustment: income band thresholds were uprated by 3.8%, matching the September 2025 CPI figure the DWP uses for benefit uprating. This prevents inflation from pushing people into lower discount bands purely because benefits increased with the cost of living.

The discount percentages, the Band D cap, the 3-month backdating limit, and the £10/week non-dependant deduction all remain unchanged.

The High Court Judicial Review

In January 2026, the High Court granted permission for a disabled Somerset resident to challenge the lawfulness of the scheme. The case, brought by solicitors Leigh Day, argues that the scheme's treatment of Universal Credit disability elements is discriminatory.

The core issue: under legacy benefits (Income Support, income-based ESA), disabled residents received passported 100% CTR. After managed migration to Universal Credit, the same residents — with the same income, same disability, same financial needs — saw their CTR collapse because Somerset's scheme counts UC disability elements (LCW and LCWRA) as income rather than disregarding them the way legacy ESA Support Component was disregarded.

The judicial review challenges this as a breach of the Public Sector Equality Duty and as irrational policy-making. The outcome could force Somerset Council — and potentially other councils with similar schemes — to redesign how UC disability income is treated.

What's Proposed for 2027/28

Somerset Council's Task and Finish Group launched a 12-week public consultation (7 July to 28 September 2026) on further changes for 2027/28. The proposals include:

• Further discount cuts: Band 1 from 100% to 60%, Band 2 from 50% to 40%, Band 3 from 25% to 20%, and Band 4 abolished entirely (dropping from 10% to 0%)
• Earnings disregard removed: the £25/week disregard for working claimants would be scrapped completely
• Non-dependant deductions increased: from £10/week to £15/week

On the positive side, the council proposes introducing a UC LCW/LCWRA income disregard — essentially the protection the judicial review is demanding for disabled UC claimants. This would allow Universal Credit disability elements to be disregarded in the same way ESA Support Component already is.

If adopted as proposed, the 2027/28 scheme would represent the most severe retrenchment of local council tax support in England. A single working person currently receiving a 10% Band 4 discount would lose all support. A single person in Band 1 would go from paying nothing to paying 40% of their bill.

What This Means for You Now

If you're currently claiming CTR in Somerset, the adopted 2026/27 rules apply until 31 March 2027. The proposed 2027/28 changes are not yet adopted.

The Executive is scheduled to consider the final proposals on 2 December 2026. Until Somerset Council adopts a 2027/28 scheme, the consultation changes remain proposals.

For the current year, make sure you're claiming everything you're entitled to under the existing rules. Our Somerset Council Tax Reduction guide covers the 2026/27 scheme in full — income bands, disregards, hardship fund, and the appeal process if your claim is refused.

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