Homeowners and tenants with certain medical conditions may be eligible for a council tax exemption or discount. According to MoneySavingExpert (MSE), hundreds of thousands of people across England, Scotland, and Wales could be missing out on a reduction without realizing it.
The average Band D council tax in England for 2026-27 is £2,392, so those who qualify could save hundreds or even thousands of pounds annually. Council tax has risen by an average of 4.9% since 2025-26, with most councils introducing a 4.99% hike for social care responsibilities.
Severely Mentally Impaired Discount
The 'severely mentally impaired' (SMI) discount can reduce a household's council tax bill by 25%, or in some cases, wipe it out entirely. To qualify, an individual must meet two key criteria, as stated by the government: they must hold a doctor's certificate confirming a permanent, severe impairment of intelligence and social functioning, and they must receive specific benefits such as PIP, Attendance Allowance, or ESA.
The government does not specifically define "severely mentally impaired," but MSE suggests several conditions that may make you eligible, including dementia (including Alzheimer's), Parkinson's, severe learning difficulties, multiple sclerosis, cerebral palsy, and severe stroke. MSE notes that a diagnosis alone does not automatically qualify; a doctor must certify the impairment. GPs cannot charge for SMI certification.
Qualifying Benefits
The person must also receive at least one of the following benefits: Incapacity Benefit, Attendance Allowance, Severe Disablement Allowance, Disability Living Allowance (higher or middle-rate care component), Increase in Disablement Pension (due to constant attendance), Unemployability Supplement or allowance, Constant Attendance Allowance, Income Support (including a disability premium), Personal Independence Payment (standard or enhanced daily living component), or Armed Forces Independence Payment. In England and Wales, Disability Working Allowance (based on income support) and Universal Credit (including an element for limited capability for work) also qualify.
Discount Amounts
The size of the SMI discount depends on the number of 'qualifying adults' in the household. Some people are not counted as qualifying adults, including those who are SMI, full-time students, under-18s, and live-in carers. The discount can be:
- 100% discount if you're SMI and live alone
- 50% discount if you're SMI and live with an adult carer
- 25% discount if you're SMI and live with one qualifying adult
- No discount if you're SMI and live with two or more qualifying adults
MSE adds: "To be clear, even if there are under-18s, students or others with a SMI in the household as well, they don't change the situation above (as they're not counted as qualifying adults) – so a household containing a person who is SMI and an under-18 is still due a 100% discount."
