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Did you know that for very low earners with disabilities council tax is a 50-75% and sometimes 100% tax on wages?

31 replies

Gtfc · 31/05/2026 21:42

Local authorities now administer their own schemes for council tax support/relief and most of them class universal credit as income when calculating eligibility. This means they also class all the parts of universal credit relating to disability that previously were ring fenced, as income. A person in receipt of these and undertaking a small amount of regular work, earning say £100-400 a month, in many local authorities now is no longer eligible for council tax support and must pay the full bill, even if that full bill is the same as their total earnings.

Some local authorities are even counting PIP as income meaning that people eligible for PIP are having to spend their PIP on paying tax.

Surely this is a gross diversion from what these monies are supposed to be used for. What is even the point in having disability benefits if those benefits are spent on local tax?

OP posts:
TigerRag · 04/06/2026 16:00

Gtfc · 03/06/2026 21:56

Absolutely. It's recent too, since people had to move to universal credit. Previously they weren't liable for council tax or at least not in the large amounts they are now because they disability benefits didn't count as income. Nobody told these people that this would happen either and none of the DWP information states it. They just found out after they switched to universal credit.

We were told that we wouldn't be worse off when we switch to UC

My original council tax liability last year was about £20 a month. Because I'm now on universal credit, even though my money has gone down because my rent has gone up, my council tax has doubled. Yet I'm receiving less money this year

My council don't count pip as income thankfully

Dweetfidilove · 16/06/2026 18:26

My local council doesn't count PIP as income.
We do count Universal Credit personal and child allowance though.
Our disabled residents (receiving a qualifying disability benefit) currently get full CTAX support. This is coming to an end though, as we're currently reviewing the system on the basis it's too generous when compared to other councils.
At the same time, CTAX has increased by 33% since 2022 😳.

Nothavingagoodvalentinesday · 16/10/2026 22:24

All benefits should be taxed as income. It is the only way to make people aware that benefits are not free and someone has to pay for them. It also gives an incentive to those on benefits to think carefully about who they vote for and the policies they prioritise. It is insane that we have one third of the population who don’t pay tax and so can, and do, continue to vote for parties that are profligate with other people’s money.

Nothavingagoodvalentinesday · 16/10/2026 22:29

elperosimpatico · 03/06/2026 04:11

This is insane. Why would anyone work when the effective tax rate is 100%!? Absolute disincentive and like they've never heard of the Laffer curve.

Welcome to the real world where governments think that all the money you receive is really there’s. They let you have a little bit of pocket money back but fundamentally they.believe that they are in a much better position to decide what your money is spent in than you are.

HelpMyBlackLabradorVotesReform · 17/10/2026 17:31

elperosimpatico · 03/06/2026 04:11

This is insane. Why would anyone work when the effective tax rate is 100%!? Absolute disincentive and like they've never heard of the Laffer curve.

Self respect?

elperosimpatico · 17/10/2026 23:04

HelpMyBlackLabradorVotesReform · 17/10/2026 17:31

Self respect?

How much work would you take on if it didn't result in you being even a penny better off and incurred extra costs such as transport, childcare and clothing etc? Do you get enough in disability benefits to cover those costs or would you have to give up things like privately bought medications to pay them? Or would you ask your partner or family to cover them?

It's a hypothetical scenario for me as I'd put my health and possibly also my life at risk by working even 1 or 2 days a week but in the event that I had the choice to work up to 16 hours, as I think is usually allowed, it wouldn't work. I don't get enough in disability benefits to cover the costs of working if there was no money coming from the job itself - I'd have to give up medications or something else I can't really afford to give up or else ask my parents or partner to pay them. In the event of a very low cost job working from home I can see that it might just about work if it wasn't going to be detrimental health-wise but those kinds of jobs are rare.

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