Simplifying Council Tax Reduction Rules in Scotland: Key Updates for 2025

In a bid to make council tax reductions fairer and more inclusive, the Scottish Government is introducing important changes to existing legislation. Here's a straightforward breakdown of what you need to know about the new amendments coming into effect on June 3, 2025.

What’s Changing?

The latest amendment updates the Council Tax Reduction (Scotland) Regulations. Its primary aim is to ensure that certain payments don't negatively affect an individual's eligibility for council tax reductions. Let’s dive into the specifics:

1. LGBT Financial Recognition Scheme Payments:

   • Payments made under the Ministry of Defence’s LGBT Financial Recognition Scheme will now be completely disregarded when determining eligibility for council tax reductions. This means if you or someone living with you receives such payments, it won't affect your council tax reduction entitlement.
   • The scheme acknowledges the hardships faced by LGBT personnel who served in the UK Armed Forces and were affected by historical bans on same-sex activities. The disregard applies both to the capital and income calculations involved in council tax assessments.

2. Infected Blood and Thalidomide Payments:

   • The amendment also tidies up the legislation by removing redundant references to payments from infected blood schemes.
   • Additionally, payments from the Thalidomide Trust are now officially listed as disregarded, ensuring they don’t count against the income of a second adult living with a council tax reduction applicant.

3. Streamlined Evidence Requirements:

   • Those receiving payments from the LGBT Financial Recognition Scheme won’t need to provide additional evidence for council tax reduction assessments, simplifying the process.

Why These Changes Matter

The adjustments are designed to protect those who receive specific types of compensation from losing out on council tax reductions. By excluding these payments from financial assessments, the Scottish Government aims to ensure that eligible individuals and families continue receiving the support they need without penalty.

Financial and Legal Compatibility

• Financial Impact: These changes won’t alter the amount of council tax you owe or the reduction you receive. They are purely protective measures to maintain current support levels.
• Legal Compliance: The amendments are confirmed to align with the United Nations Convention on the Rights of the Child, ensuring they respect children's rights.

No Consultation or Additional Impact Assessments

The government did not conduct formal consultations or additional impact assessments, as these changes are seen as straightforward adjustments to existing rules.

In summary, the 2025 amendments to the council tax reduction regulations in Scotland aim to ensure fairness and continue support for those impacted by historical injustices. This update is a step towards making the system more equitable and easier to navigate for everyone involved.