Could you be owed a council tax refund after moving to universal credit?

If you’re living with a disability and your council tax increased after you moved from employment and support allowance (ESA) to universal credit (UC), you may be able to get that money back.

Following a recent high court ruling, those affected may be able to challenge the increase and reclaim money.

Here’s what happened.

What was the court case about?

Two claimants brought a case against their local authority after their council tax increased when they migrated to UC.

Their overall income had not increased but the council treated their transitional protection payment as additional income. This reduced their entitlement to council tax reduction and increased the amount they had to pay.

The high court ruled this was discriminatory because:

• the transitional protection element was linked to disability
• their income had not increased as a result of moving to UC
• their council tax liability had increased purely because of how the payment was treated

The court ordered the council to:

• pay the claimants £5,000 in damages for discrimination
• refund the additional council tax charged
• cover their legal costs

The council must now disregard transitional protection payments for all residents when calculating council tax reduction.

Challenging an increase

If you have found yourself in this position, you may be able to challenge the increase in your council tax.  You will need to show that:

• you were receiving the severe disability premium prior to migration
• your council tax liability has increased significantly following migration to UC
• your local authority do not expressly disregard, or provide a discretion to disregard transitional payments

Every council has a duty to publish its council tax reduction scheme, so you should be able to find it on their website.

What's transitional protection?

Transitional protection is designed to ensure that people are not worse off at the point they move to universal credit.

It can include:

Transitional element

A top-up payment added to UC  where previous benefits were higher.

Transitional capital disregard

For those moving from tax credits, savings over £16,000 may be ignored for up to 12 assessment periods.

Transitional student disregard

Allows certain full-time higher education students, or their partners, to claim universal credit until the course ends.

These measures are intended to protect income during the transition to UC.

What's managed migration?

The department for work and pensions (DWP) is gradually replacing older benefits with universal credit, which combines several benefits into a single monthly payment. The process of transferring claimants across is known as managed migration.

What to do if your council tax increased

If your council tax increased after moving UC, you should:

• review the local authority’s council tax reduction scheme
• check how transitional protection payments are treated
• compare income before and after migration
• consider seeking advice about challenging the decision if income remained the same but council tax increased

A successful challenge could result in a refund and, in some cases, compensation.

Need support?

Help is available if you’re unsure about your position:

• contact the DWP directly
• contact your local Jobcentre

If you think you might be missing out on benefits, we can check you’re claiming everything you’re entitled to. So get in touch or try our benefits calculator. 

How to claim universal credit

Universal credit can be claimed:

• online
• by phone: 0800 169 0328
• in person at a local Jobcentre

It usually takes around five weeks to receive the first payment after applying. Payments continue unless circumstances change.

Want to improve your chances of a smooth application?

Read of our article on how to increase your chances of a successful universal credit claim.