£150 Council Tax rebate payments begin for Bands A to D in England

Payments of a £150 rebate in Council Tax bills began on Friday 1 April 2022 for households in Bands A to D in England, covering 80% of households, the government said¹. The rebate forms part of a support package worth over £9.1 billion, with the majority of households receiving £350 in total¹.

The rebate is not means-tested, as the Chancellor noted that price rises are affecting those on middle incomes as well as lower incomes². Local authorities were expected to credit people's accounts with £150 in April, using saved bank account details for those paying by direct debit². The government said the package also includes a £200 reduction in energy bills for all households from October 2022 through the Energy Bills Support Scheme¹. Which? reported that all domestic electricity customers would receive a £200 credit on their energy bill in October 2022, but that the government would initially meet the cost and households would repay it in £40 instalments over five years from 2023².

The rebate was announced for England, with equivalent funding for the devolved nations. On 10 February 2022, SNP finance secretary Kate Forbes announced that 73% of Scottish households would also receive a £150 council tax rebate in April 2022, going to those in all council tax bands currently part of the council tax reduction scheme, plus those in council tax bands A to D in Scotland². On 15 February 2022, the Welsh government announced it would issue £150 council tax rebates "as soon as possible" to Welsh households in council tax bands A to D, and to those in the council tax reduction scheme². As council tax systems in Scotland, Wales and Northern Ireland work differently from England, these devolved nations were expected to receive £565 million of Barnett funding as a result of the rebates granted in England².

The government also said the Warm Homes Discount scheme is being extended until 2025/2026 and expanded to reduce the energy costs of around £3 million low-income and vulnerable households every year, while the Energy Company Obligation scheme will see £1 billion annual funding until 2026¹. Which? reported plans for a £10 uplift to £150 under the Warm Homes Discount from October, with more detail on qualifying households to be published after a consultation².

Why it matters for households

Households in Bands A to D in England were due £150, paid from 1 April 2022, with the money not needing to be repaid². For those paying council tax by direct debit, the rebate was expected to be credited automatically using saved bank details; anyone not paying by direct debit was told to await a letter from their local council with instructions on how to claim³. The Local Government Association has said that councils will not call asking for bank details³.

Local authorities were also given a discretionary fund to help those on low incomes and vulnerable residents, particularly those who do not pay council tax and therefore would not receive the rebate, or who pay council tax on properties in Bands E to H; how much help is given, and who is eligible, varies between local authorities².

The £200 energy credit announced for October 2022 was described by Which? as a credit loan that must be repaid, at £40 a year over five years from 2023². The government described it as a £200 reduction in energy bills for all households from October 2022¹.

What happens next

The second instalment of the £650 cost of living payment for low-income households was due in autumn 2022, following the first payment from 14 July 2022³. The £200 energy credit was due in October 2022¹. The Warm Homes Discount extension runs until 2025/2026¹, with further detail on qualifying households to follow a consultation².