MSE News

Wales champions ‘severely mentally impaired’ £400/yr council tax discount

The Welsh government will ensure a long-standing council tax reduction is no longer hidden for people diagnosed as 'severely mentally impaired' - making it easier for some to save £100s/yr and to claim £1,000s in rebates. Martin Lewis is now pushing for changes in the rest of Great Britain. 

The announcement is in response to a campaign by, and will ensure some with conditions such as dementia (including Alzheimer’s disease), Parkinson’s disease, severe learning difficulties or a stroke are told that they may be due £1,000s in rebates.

Since 2016, we've been warning that tens of thousands of 'severely mentally impaired' people who are entitled to a council tax discount could be missing out on about £400/yr, as the application process varies between councils and our investigation found front line staff sometimes gave out wrong information. Some councils allow residents to claim backdated rebates and others don't.

But now the Welsh Government and all 22 Welsh local authorities have made every change called for by MSE in our 2017 report, The Disregarded Discount. This means the application form for the discount will be standardised across the country, and backdating is to be allowed by EVERY council in a standardised way.

Martin: 'Most councils haven’t helped spread the word'

Martin Lewis, founder of, said: "Many of the most vulnerable within our society, those who are living with a ‘severe mental impairment’, have been eligible for a council tax discount for years, but sadly, across Britain they have rarely been about told it – meaning they’ve missed out on money that could’ve transformed their quality of life.

"Most councils haven’t helped spread the word, and disgracefully have often hindered people claiming by giving out misinformation. Some staff in our cold-calling exercise even said the discount doesn’t exist, meaning there are huge differences in take-up across the country. That simply isn’t right.

"I’m delighted that our research and campaign has been so warmly welcomed in Wales, and congratulate the Welsh Government and Welsh local councils for their swift and comprehensive action once it was alerted to the issue.

"Wales will be a beacon of light on this, bringing justice and real, significant change that will help some of society’s most needy. We've had encouraging noises from Scotland and we’re hopeful it'll soon follow Wales. Yet there's a lot of work to be done to bring England out of the dark too. It should be easy to do, the law is identical to Wales, but we need the Secretary of State James Brokenshire, and the Local Government Association to give it the attention it deserves."

What changes are being made in Wales?

Following MSE’s recommendations, the following will happen across Wales:
  • Standardised easy application form adopted by all 22 Welsh councils. Throughout Great Britain, each council’s application procedure for the SMI discount differs. Wales has introduced a standardised application procedure and form for all of its councils, designed with MSE's input. A universal version of this is available on the Welsh Government website – so it can be distributed by charities, advice centres and pharmacies to people who may be able to claim.

  • Backdating to be allowed by EVERY council and in a standardised way. ALL claimants who are eligible for the discount will have it automatically backdated, with a rebate for any overpaid council tax, back to the point of an SMI diagnosis. Before now, it's been a postcode lottery (and still is elsewhere in the Britain), as some councils do allow backdating, while others don’t.

  • Common, consistent and clear literature. There is now a dedicated webpage, with details of the discount and how to claim, and a leaflet of the information (which also helps council call-handlers).

How does the ‘severely mentally impaired’ discount work?

To qualify, someone must be medically certified as having a severe mental impairment (ie, one that severely and permanently affects their intellectual and social functioning). If a person is certified as having an SMI by a doctor and is eligible for one of a number of benefits – such as attendance allowance, incapacity benefit, employment and support allowance or universal credit – they are exempt for council tax purposes (in a similar way to students and under-18s).

This means if they live with one other person, usually their carer, and no other adults (or only adults who are also disregarded for council tax purposes), then the household is entitled to at least 25% discount – worth an average £400/yr in Wales. Those living alone are entitled to a 100% discount, so they don’t pay council tax at all.

MSE has been campaigning to raise awareness of this discount since 2016 – more information on how to claim in our How to claim the 'severely mentally impaired' council tax discount guide

What does the Welsh Government say?

Welsh Finance Minister Rebecca Evans said: "I am delighted that the Welsh Government is leading the way with this new approach, helping some of Wales' most vulnerable people when they need it most.

"This is a great example of collaborative working and supports the Welsh Government’s commitment to making council tax fairer.

"We will continue to work closely with local authorities and the WLGA (Welsh Local Government Association) to encourage consistency in approaches to administering discounts and exemptions for everyone who is eligible."

'Scottish councils should work with MSE'

Public Finance Minister Kate Forbes said: "I congratulate MoneySavingExpert for its work on the council tax discount for those suffering from a severe mental impairment.

"I would be very concerned if households were having difficulty in accessing the support they are entitled to in Scotland and have raised this with COSLA, the voice of local government in Scotland, on a number of occasions.

"Council tax is a local tax, with administration and collection the responsibility of each individual local authority. I encourage councils to work with MoneySavingExpert to identify if more could be done to make it easier for potentially eligible households to access the Severely Mentally Impaired discount."


MSE weekly email

FREE weekly MoneySaving email

For all the latest deals, guides and loopholes simply sign up today – it's spam-free!