A man has received a £5,989.30 council tax refund for his elderly father after acting on Martin Lewis's advice about the Severe Mental Impairment (SMI) discount.
In an episode of The Martin Lewis Podcast, released via BBC Sounds and Spotify, the money expert revealed that a listener named Mike wrote in with a success story. Mike said his father, who has vascular dementia, obtained a 100% discount on his council tax bill, worth over £2,000 a year, on top of an existing 25% single occupancy discount.
Mike explained: “My ears pricked up some months ago when you talked about potential discounts for mental incapacity on council tax bills.” He added that the council refunded nearly five years of charges, resulting in a payment of £5,989.30 to his father's bank account.
What is the Severe Mental Impairment discount?
Martin Lewis explained that the SMI discount applies to people with a severe loss of social functioning, such as Alzheimer's, dementia, severe strokes, or severe Parkinson's, who are also eligible for certain disability benefits. He noted that it is “hideously underpublicised” and that some council frontline staff do not know how it works.
Lewis said: “What it effectively means is someone who has severe loss of social functioning... They can get the SMI discount on council tax.” He added that if someone gets the SMI discount, they are “effectively disregarded for council tax purposes.”
How the discount affects council tax bills
In a household with two or more people, full council tax is paid. But if there are only two people and one has SMI, it counts as one person living there, so the 25% single person discount applies. If someone lives alone and is disregarded, they pay no council tax at all.
Lewis said: “If somebody lives alone and they are disregarded for council tax, then just like an all-student household doesn’t pay council tax, then an all-SMI household doesn’t pay council tax either.”
Backdating depends on your council
Lewis noted that backdating is not guaranteed because each council has its own rules. He said: “Backdating is council by council, though in Wales they have standardised rules.” He added that whether a backdated payout is received depends on the individual council's policy.
Lewis has long campaigned on the issue, praising Wales for improving its system and calling for England and Scotland to follow suit.
