Council tax rates are set to increase from April 2026, but individuals living with certain medical conditions could see their bills reduced—or even eliminated. To qualify for these discounts, a formal diagnosis from a doctor and receipt of specified benefits are required.
According to Martin Lewis and his Money Saving Expert team, those diagnosed with a permanent ‘Severe Mental Impairment’ (SMI) may be eligible for a council tax reduction ranging from 25% up to a full exemption.
The SMI discount applies directly to the household’s council tax bill, effectively lowering it by at least a quarter and in some cases wiping it out entirely. SMI is a medical classification that includes conditions such as dementia (including Alzheimer’s disease), profound learning difficulties, multiple sclerosis, severe stroke aftermath, and other cognitive disorders.
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Martin Lewis explains, “‘Severe Mental Impairment’—a harsh term, but an official one—refers to a permanent, significant impairment in intelligence and social functioning. Importantly, a doctor must certify this condition for one to qualify for the discount.”
Moreover, Money Saving Expert highlights that if there are individuals with SMI in the household who are under 18 or full-time students, this does not impact the eligibility or amount of the discount, as these individuals do not count towards council tax liability.
The nine qualifying conditions include:
- Dementia
- Alzheimer’s disease
- Parkinson’s disease
- Severe learning difficulties
- Multiple sclerosis
- Long-lasting effects of a severe stroke
- Schizophrenia
- Schizoaffective disorder
- Other severe, permanent cognitive impairments
Previously, in England and Wales, eligibility for qualifying benefits was enough to secure the discount, regardless of whether the benefits were actively received. However, a recent High Court ruling has overturned this, requiring actual receipt of the benefits to qualify.
This change underscores the importance of having up-to-date documentation and benefit status to access these vital council tax reductions.