Three new council tax exemption rules are now in force under Andy Burnham's government, following confirmation from the previous Sir Keir Starmer administration earlier this year. The new so-called 'disregards' were confirmed by the Local Taxation and Pensions Division of the Ministry of Housing, Communities and Local Government in January, when Starmer was still Prime Minister and before Mr Burnham succeeded him.
The guidance to local authorities states: "Consistent with the wider benefits system, the Regulations make changes so that a pension age person’s claim is not affected by the receipt of certain payments."
What the new disregards cover
The new rules add three specific disregards to council tax reduction schemes:
- Payments made through the Armed Forces Lesbian, Gay, Bisexual and Transgender Veterans Financial Recognition Scheme will no longer affect entitlement to a reduction.
- Miscarriage of Justice Compensation payments administered by the Ministry of Justice will no longer affect entitlement to a reduction.
- Adult Disability Allowance payments made under the Scottish Adult Disability Living Allowance Regulations 2025 will not affect entitlement to a reduction where a recipient receives them for a transitional period after moving to England from Scotland.
The changes are designed to ensure that these specific payments do not push pension-age claimants out of eligibility for council tax support, aligning with the wider benefits system.
Fairer system for vulnerable people
The government also confirmed that vulnerable people will have more time and support to settle outstanding council tax bills under reforms to make the system fairer. At the time of the announcement, Local Government Secretary Steve Reed said: "Too many families are facing aggressive enforcement action, with people left terrified of bailiffs knocking on the door because one month’s council tax bill was missed.
"We will stop this and make the system fairer by supporting families who fall behind. I want to thank Martin Lewis and his charity for their tireless campaigning, shining a light on this crucial issue affecting millions of people."
Minister for Local Government Alison McGovern added: "We know the way council tax is run is outdated and confusing and has stopped some of the most vulnerable people from accessing the support they need. Our changes will cut through the complexity and make sure that council tax is fit for the 21st century."
The reforms mark a shift in how local authorities handle arrears, with a focus on supporting households rather than immediate enforcement. The new disregards take effect immediately, providing immediate relief for affected claimants in Birmingham and across the country.
