There is a special Council Tax Benefit which can be paid in some cases even if your income or savings are too high to get the normal Council Tax Benefit. You can get it if you are single (or not living with your husband or wife) and have someone living in your home who meets all the following conditions:

• is aged 18 or over
• is not paying you rent 
• is not your husband, wife or civil partner
• is not living with you as if you are married 
• does not have to pay Council Tax themselves 
• has a low income. 

This reduction is called Alternative Maximum Council Tax Benefit and it is claimed by fewer than one person in ten who could get it.

If the person living with you gets any Pension Credit, Income Support or income-based Jobseeker’s Allowance, then your Council Tax is reduced by 25 per cent. If their gross weekly income, before tax is deducted, is less than £169, it is reduced by 15 per cent. If their gross weekly income is less than £220, your Council Tax is reduced by 7.5 per cent.

If the person living with you is a student and you get Pension Credit then you will get your Council Tax reduced to zero.

Their savings are not taken into account. But any interest they get (before tax is deducted) counts as part of their income.

If they get Attendance Allowance or Disability Living Allowance those amounts are ignored when calculating their gross income. The rebate applies to the Council Tax due for each day they live with you and fulfil the conditions.

If you have more than one person living with you (such as two grown-up children) and they all meet the conditions listed above, then you may still get the Alternative Maximum Council Tax Benefit. If their incomes added together (ignoring any Pension Credit, Income Support or income-based Jobseeker’s Allowance) are less than £169, then you get a 15 per cent reduction. If their incomes added together are less than £220, then you get a 7.5 per cent reduction. If everyone living with you is on Pension Credit, Income Support or income-based Jobseeker’s Allowance, then you get a reduction of 25 per cent.

If you think you may be eligible for Alternative Maximum Council Tax Benefit you must apply to your local council. It can be backdated up to a year but that will be reduced to 3 months for claims made from 6 October 2008.

If you qualify for normal Council Tax Benefit and for Alternative Maximum Council Tax Benefit, you cannot get them both. You will get whichever is higher.