Changes to the Council Tax Support Scheme consultation

Have your say on proposals for a new Council Tax Support Scheme from April 2026 

Lambeth Council is proposing to change its working age Council Tax Support Scheme from April 2026. Council Tax Support is a reduction in the amount of Council Tax that people on low incomes need to pay. We are proposing to introduce an income-banded scheme, where working-age residents are awarded support based on their household income. These changes would not apply to households of pension age, as the criteria for this scheme is set by central government.

Why we’re proposing changes 

We are committed to providing the best possible financial support to our most vulnerable residents. However, we need to make significant savings of £183 million over four years due to unprecedented demand for services, rising costs and over a decade of underfunding for local government. We’ve already agreed £99 million of savings, including cuts to the number of senior staff, a pause to non-essential recruitment and renting out council buildings, we now need to find £84 million more. 

The banded scheme we are proposing would enable us to continue targeting support at those on lowest incomes, whilst reducing the overall cost of the scheme to the council.   

Background 

Council Tax Support is a reduction in the amount of Council Tax people on low income have to pay the council. It is funded by the council. 

There are two Council Tax Support schemes; one is for people above pension age and the other is for people who are below pension age (we call this ‘working age’). 

The way in which Council Tax Support is calculated for pensioners is set nationally and the council has no control about how the reduction is calculated. Pensioner Council Tax Support claims will not be affected by this consultation. 

We have worked hard to support our communities through the cost-of-living crisis and the spike in inflation. Our Council Tax Support Scheme provides significant financial support for almost 23,000 people, a number that will stay largely constant no matter what the outcome of the consultation. This proposal aims to balance introducing a more affordable scheme for the Council, with continuing and targeting support to those that need it most. 

The proposal being consulted on would save the council £2.4million from the cost of running the Council Tax Support scheme if adopted as outlined, whilst still offering approximately £27 million in support for the borough’s most vulnerable households. 

Lambeth Council’s Discretionary Council Tax Support Hardship Payment scheme would remain in place with £300,000 available to support those struggling to pay. This could be used to help reduce the impact on people who do change band if the revised scheme is adopted. 

Our current Council Tax Support scheme 

Currently, people of working age are usually entitled to Council Tax Support up to a maximum value of 80% of their Council Tax bill. This means that they must pay a minimum of 20% of their Council Tax bill themselves. 

The current scheme is a ‘means-tested’ scheme. This means that a person’s income is compared to an amount it is considered necessary for their family to live on, often referred to as an ‘applicable amount’. 

Proposed Council Tax Support scheme detail 

Lambeth propose to move to what is known as a ‘banded scheme’. In a banded scheme the level of support is based on: 

• Income bands where people are grouped into a band according to their income 
• Household circumstance bands where households are grouped into a band according to the make-up of the household 

Each band has a set amount of support that people in that band will receive. Each household will be in a specific band for both income and household circumstance. The proposed scheme, included as part of this consultation has been costed to ensure the scheme is affordable for the council, while targeting support to those we know need it most. 

• See our proposed banded scheme in detail 
• See our Current Lambeth Council Tax Support Scheme 2025-26
• See advantages and disadvantages of our proposed banded scheme 
• See example scenarios, comparing our current Council Tax Support scheme with the proposed banded scheme 
• See our Frequently Asked Questions (FAQ's) 

 About the consultation 

The law says the council must produce a scheme for working-aged people and that it must reconsider the scheme each year. If the council is proposing to make changes to the scheme it must carry out a consultation. 

Completing the survey

• You can have your say by completing the survey online.
• To view a copy in your own language, please click the country flag icon in the bottom right hand corner of the page.
• Paper copies can be made available by visiting one of our libraries.
• For any enquiries you can email TPU@lambeth.gov.uk

After the consultation closes 

The findings of this consultation will be presented to the council’s Cabinet Member for Finance and a final decision will be made. Your views will help us design a new scheme that takes into consideration the views of all those who respond to this consultation. 

An update with the final decision will be published on this page and a new scheme will be introduced on 1 April 2026.