Do I pay council tax if I move to a care home?

 In Blog

Do I pay council tax if I move into a care home? It depends. If you permanently move into care and your former home is now empty, it’s usually exempt from council tax. However, if someone else lives there, or you still own the property, you’ll likely still need to pay.

Moving into a care home is a significant  change, impacting both your daily life and your finances. While the cost of care itself is a major consideration, it’s easy to overlook other ongoing expenses – like council tax.  Understanding how council tax works when you’re in a care home can save you money and ease some of the financial worry that often comes with this transition.  In this article, we’ll break down the key things  to know about council tax and care homes, including potential exemptions that could significantly reduce your bill.

Understanding Council Tax Basics

Council tax is a local tax levied on most residential properties in the UK.  The amount you pay depends on two things: first, the valuation band your property falls into (based on its worth at a specific date in the past), and second,  the specific rate your local council sets for that band.  This tax funds essential services in your community, such as rubbish collection, libraries, and road maintenance.

Here’s a crucial point to remember: it’s usually the resident of a property who is liable for council tax, not the property itself. This is why the rules change when you move into a care home and someone else is now the primary resident.

Council Tax and Care Homes: Key Scenarios

Scenario 1: Your Property is Now Empty

If  you’ve made a permanent move into a care home and your property is left unoccupied, it’s usually exempt from council tax. There shouldn’t be any charge to pay.  However, there are exceptions.  If a family member, friend, or another person moves into your home, even temporarily, they  become liable for the council tax. Additionally, some councils offer discounts for homes that are empty and unfurnished for an extended period, even if you don’t intend to sell immediately. It’s always worth inquiring about this with your local council.

Scenario 2: Someone Else Now Lives in Your Property

Whether it’s an adult child, a relative, or a renter, if your former home is now someone else’s primary residence, the council tax responsibility falls to them.  This rule is in place to prevent situations where people could claim a property is “empty” to avoid tax, even if others are living there.

Scenario 3: Severe Mental Impairment (SMI)

If you have a severe mental impairment that significantly affects your intelligence and social functioning, you may be exempt from paying council tax.  This exemption often applies to individuals with conditions like advanced Alzheimer’s disease, Parkinson’s, profound learning disabilities, or those who have suffered a severe stroke.

To qualify for the SMI exemption, you’ll need a medical certificate from your GP or another registered medical professional confirming your diagnosis.  Additionally, you must receive at least one qualifying benefit, such as Attendance Allowance, Disability Living Allowance, or Personal Independence Payment.

Important Note: Even if you were receiving a qualifying benefit and were exempt from council tax before moving into care, it’s crucial to reapply for the exemption under your new circumstances. The care home move could impact your eligibility.

Discounts & Reductions: What to Ask About

Even if you don’t qualify for a full council tax exemption, there are additional ways to potentially reduce your bill:

  • Single Person Discount: If you lived alone prior to moving into a care home, you were likely receiving a 25% single person discount on your council tax.  It’s important to inform your council of your change in circumstances.  In some cases, depending on their specific policies,  you may still be eligible for this discount.
  • Council Tax Reduction: This program (formerly known as Council Tax Benefit)  is designed to help people on low incomes manage their council tax payments.  Eligibility is based on factors like your income, savings, and whether you receive other benefits.
  • Hardship Funds: While not widely advertised, some councils have hardship funds to offer additional support to residents facing financial difficulties.  It’s always worth asking your council if something like this is available in your area.

Other points of Note

  • “What Ifs”:  Not every situation fits neatly into the main scenarios. Here are answers to some frequently asked questions:
    • What if I own my home jointly with someone else? Joint owners are usually BOTH liable for council tax. There are some narrow exceptions (if one owner is in care and the other is under 18, etc.). Your council can clarify.
    • What if I’m only in the care home temporarily? If your stay is intended to be short-term, you likely remain liable for council tax on your home. Always clarify this with your council, as the definition of “temporary” can vary.
  • Time Limits:  It’s vital to inform your council about changes in your living situation as soon as possible. Delays can mean you miss out on potential exemptions or refunds.  You may be able to backdate claims in certain cases if you weren’t aware of your eligibility, but it’s best not to rely on this.

Who Else Might Be Exempt from Council Tax?

Certain individuals  are “disregarded” for the purpose of calculating council tax, meaning they are not included when determining who is liable for the bill.  This effectively exempts them from payment.  Groups who commonly fall under this include:

  • Residents of Long-Term Care Facilities: People living permanently in care homes, hospitals, or certain types of shelters.
  • People with Severe Mental Impairment (SMI): If you have a medically diagnosed condition that profoundly affects your cognitive and social functioning, you may qualify for SMI status. Examples include advanced dementia, Parkinson’s Disease, or the after-effects of a severe stroke. To obtain SMI status, you’ll need certification from a doctor and must be receiving qualifying benefits.
  • Others: Additional groups often exempt include low-paid live-in care workers, full-time students, those caring for a disabled person (who isn’t a spouse or minor child), members of certain religious communities, and prisoners.

Important Note: The specific rules about who qualifies for disregarded status can vary slightly  between councils.  Always check with your local council for the most up-to-date information.

Getting Help

Resources:  Navigating council tax can feel overwhelming, especially on top of arranging care.  Here are some helpful resources:

  • Age UK: (https://www.ageuk.org.uk/) Provides general advice on benefits and finances for older adults
  • Citizens Advice: (https://www.citizensadvice.org.uk/) Offers guidance on a range of issues, including council tax disputes
  • Your Local Council Website: Often has detailed council tax guides specific to your area

FAQ

  • What happens to council tax when someone moves into a care home? It depends. If your house is now empty because you’ve made the move permanent, it’s usually exempt. If anyone else now lives there (family, renters, etc.), they become responsible for the tax.
  • Why do dementia patients not pay council tax? Not all dementia patients are automatically exempt. Those with advanced dementia or other conditions causing Severe Mental Impairment (SMI) may qualify for an exemption. They’ll need a doctor’s assessment and usually must be receiving certain benefits.
  • Do I still get a council tax bill if I keep my house but move into a care home? Most likely, yes. Since you technically still own the property, you remain liable for the tax unless it qualifies for an exemption (empty, or you have SMI status).
  • What illnesses make you exempt from council tax? There’s no single list of illnesses. It’s more about how the illness affects you. Severe Mental Impairment is the main medical reason for exemption. Conditions that can lead to this include advanced dementia, Parkinson’s, the after-effects of a major stroke, and others. Your doctor can advise if you might qualify.