The Council Tax Rebate and a £144 million Discretionary Fund were announced on 3 February 2022 as part of a package of support for rising energy costs1. The rebate is a £150 non-repayable payment for households in England in council tax bands A to D, and the Discretionary Fund is for billing authorities to support any household in need, regardless of council tax band1. The guidance issued to billing authorities applies to England only; the devolved administrations were to receive around £576 million corresponding funding through the Barnett formula to provide similar support1.
Eligibility for the core rebate is determined by a property's position at the end of the day on 1 April 2022. The property must be valued in bands A to D, be someone's sole or main residence, and be a chargeable dwelling or in exemption classes N, S, U or W1. Only one £150 payment is made per household, regardless of the number of occupants or liable council taxpayers1. Payments are non-taxable and treated as local welfare provision, so they are not counted in the calculation of income-related benefits1.
Funding was paid to billing authorities in March 2022, and all Council Tax Rebate grants were to be paid as soon as possible from April1. All payments within scope of the reconciliation process had to be made by 30 September 20221. Allocations from the Discretionary Fund should be spent by 30 November 2022, and any unspent funding by that date is required to be repaid to government; in the event of an overspend, no additional funding will be provided1.
The regulations require an explanatory sentence in council tax demand notices issued to households in respect of 1 April 20221:
"The Government is providing a £150 one-off Energy Bills Rebate for most households in council tax bands A-D"
The Council Tax (Demand Notices and Reduction Schemes) (England) (Amendment) Regulations 2022 came into force on 12 February 20221. Where a council holds live direct debit instructions for an eligible household, it should make an automatic payment as early as possible in the 2022-23 financial year; where it does not, it is expected to make all reasonable efforts to contact the household and invite a claim, including an option for residents who are digitally excluded1.
| Element | Amount | Scope |
|---|---|---|
| Council Tax Rebate | £150, non-repayable | England, council tax bands A to D |
| Discretionary Fund | £144 million total | Any household in need, any band |
| Devolved administrations | Around £576 million | Barnett formula funding |
Why it matters for households
The rebate was a fixed £150 payment tied to a property's council tax band rather than to energy use or consumption, so a household's energy bills and energy independence position depended on whether its home fell in bands A to D on 1 April 2022. Households in bands E to H were outside the core rebate, though the Discretionary Fund allowed councils to support any household in need regardless of band1. Because the payment was made once per household, larger households received the same amount as single-occupant homes1. The treatment as local welfare provision meant the payment did not reduce income-related benefits1. The Discretionary Fund was time-limited, with unspent allocations repayable to government after 30 November 20221.
What happens next
Funding was paid to billing authorities in March 2022, with rebate payments to start as soon as possible from April 20221. All payments within scope of the reconciliation process had to be made by 30 September 2022, and Discretionary Fund allocations spent by 30 November 20221. The guidance does not set out any further steps beyond those dates.