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£150 council tax energy rebate 2022: do I need to apply, when will I get it, how to claim and check bands

UK chancellor Rishi Sunak announced the £150 council tax rebate in February in a bid to help households cope with a major increase to the Ofgem price cap

The UK is currently in the grip of a major cost of living crisis that’s pushing prices up at the fastest rate since 1992.

Inflation hit a new 30-year high in March, with worse CPI figures still yet to come as April’s hikes to bills and taxes - as well as the Ofgem energy price cap - are yet to be factored into the Office for National Statistics (ONS) data.

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Boris Johnson’s government has sought to intervene through the one-off loan for energy bills and a council tax rebate for some households - although NationalWorld analysis has found millions of people are set to miss out, while some others will be hit by larger increases to council tax.

There have also been major delays to the £150 rebate scheme, with some local authorities saying they are struggling to administer the rebate before the 30 September deadline imposed by central government.

So how does the council tax rebate work, when will it be paid out - and who’s eligible?

Here’s everything you need to know.

What is a council tax rebate?

A tax rebate is essentially a refund you receive in the form of credit from HMRC.

You get one when you’ve paid too much tax on, among many other things, your income or a redundancy payment.

Usually, you wouldn’t get a rebate on your council tax - rather, your council tax gets reduced.

Rishi Sunak announced the energy bill support measures on 3 February (image: PA)

If you’ve paid too much council tax or are eligible for a reduction, the council will reduce your future bills rather than return money to you.

There are a number of ways by which you can reduce your council tax payments, although you have to meet specific criteria.

For example, if you live alone, you can get a 25% reduction.

Or, if you’re on a low income, you can share your circumstances with your council and they will work out how much your tax can be reduced by.

How will the energy bills council tax rebate work?

In February, the Chancellor Rishi Sunak announced households in council tax bands A to D - i.e. low-to-middle income households - would receive a council tax rebate of £150.

Meanwhile, councils will be given an extra £144m pot to support vulnerable households.

According to central Government guidance to local authorities, funding for the rebate and support pot was released to councils in March.

Many UK Households are having to watch every penny as a result of the cost of living crisis (image: PA)

It said this money should then be given out “as soon as possible” from April, and by 30 September 2022 at the latest.

However, after consumer site Money Saving Expert reported two councils had revealed they would struggle to pay out the rebate before June due to software issues, there have been reports of dozens other councils delaying the payment.

Meanwhile, some households in Leeds received £300 instead of £150 due to a banking error.

Who is eligible for council tax rebate?

Rishi Sunak’s council tax announcement only applies to England, although Scotland and Wales have also opted to introduce the scheme (more on that below).

Mr Sunak said his estimated £3bn plan would help 80% of English households (more than 20 million homes).

The full £150 rebate will even be given to those who are exempt from paying council tax, like students, or who pay a reduced rate of council tax.

How much of a difference this rebate will make depends on where in the country you live.

Households in areas where prices have soared since 1991 - the year used to benchmark the value of properties for council tax - could still be paying some of the lowest council tax bills in the country despite living in high-value properties.

And although more homes will be eligible for the £150 in the North of England than the South, higher council tax rates in the North would mean the money may not go as far as it will in the South.

Will the other UK nations get a council tax rebate?

The Barnett formula - the mechanism that provides Scotland, Wales and Northern Ireland with money equivalent to any Government spending increases in England - will give the devolved administrations around £715m as a result of the energy crisis support package for England.

Scotland and Wales have opted to introduce their own versions of the rebate scheme but Northern Ireland has not because its equivalent of council tax is different to the rest of the UK.

Nicola Sturgeon’s devolved administration has introduced the council tax rebate scheme - but has criticised it for not helping households enough (image: Getty Images)

The devolved administrations’ schemes will be similar to England’s rebate scheme and will also become available from April.

Scotland’s system allows councils to either give the payment out as a cash payment or as credit off future council tax bills.

The Ofgem energy price cap rise affects all households in the UK, so it is expected that they will all be forced to take measures to cushion the financial blow.

But the devolved administrations do not have all the levers the UK Government in Westminster has to take action.

For example, they cannot set or alter the rate of VAT, meaning one popular idea to cut VAT from energy bills cannot be pursued by them.

Meanwhile, households in Scotland are set to see a 4.2% increase in their water charges from April.

These are collected alongside council tax as water is nationalised in Scotland.