Money saving expert Martin Lewis has issued a vital reminder to UK households, revealing that thousands could be eligible to have their council tax bill reduced to absolutely nothing.
What is the Severe Mental Impairment discount?
The key to this significant saving is the Severe Mental Impairment (SMI) discount for council tax. In the latest episode of The Martin Lewis Podcast, available on platforms like BBC Sounds and Spotify, the financial guru explained that this little-known relief can lead to a 100% reduction.
"What it effectively means," Martin clarified, "is someone who has a severe loss of social functioning. This is common with Alzheimer’s, dementia, people who have had severe strokes, or somebody with severe Parkinson’s, and who are eligible for certain disability benefits." He emphasised that the scheme is "hideously underpublicised," with even some frontline council staff unaware of how it functions.
A real-life 'lifesaver' refund of nearly £6,000
The powerful impact of this advice was demonstrated by a listener named Mike, who contacted the show. After hearing Martin discuss the discount months ago, Mike investigated for his elderly father who has vascular dementia.
"Thanks to your programme I’ve been able to obtain a 100% discount on his council tax bill, some £2,000+ a year," Mike reported. The council also backdated the refund nearly five years, resulting in a staggering payout of £5,989.30 directly into his father's bank account.
Mike described the financial boost as a "lifesaver," explaining that "things are tight with carer costs and increasing tax bills." The episode featuring this success story originally aired on 22 December.
Who qualifies and how does it work?
Eligibility for the SMI discount hinges on two main criteria. First, a medical professional must certify that the person has a condition leading to "severe impairment of intelligence and social functioning." Second, the individual must be entitled to a qualifying benefit, such as Attendance Allowance or the daily living component of Personal Independence Payment (PIP).
If a person with SMI lives alone, they are completely disregarded for council tax purposes. This means, as Martin Lewis pointed out, "just like an all-student household doesn’t pay council tax, then an all-SMI household doesn’t pay council tax either." The discount can also apply if they live with a carer or another disregarded person.
Rules on backdated refunds vary significantly and are decided on a council-by-council basis. Martin noted that Wales has standardised its rules, but in England and Scotland, whether you receive back pay "depends on your individual council’s policy." He has long campaigned for improvement, praising Wales's system and calling for England and Scotland to follow suit.
For families supporting someone with a severe cognitive condition, checking eligibility for this discount could provide crucial financial relief during challenging times.
