High Court agrees to hear challenge over lawfulness of council tax reduction scheme

Represented by law firm Leigh Day, the claimant is unable to work because of multiple physical and mental health conditions. He relies on means-tested benefits which he is entitled to due to his disability.  

Until recently, the claimant did not have to pay council tax under the council’s reduction scheme in recognition of his disability.

However, after being migrated from ‘legacy’ benefits to Universal Credit, the council reassessed his entitlement and “drastically” reduced the relief he receives towards council tax, the law firm noted.

The claimant is now being asked to pay 90% of the council tax bill for his property, despite there being no change in his level of income or his needs. 

Leigh Day noted: “[The claimant] argues that this stems from discriminatory structural flaws in the design of the council’s scheme, rather than anything specific to his circumstances. Whilst legacy benefits are disregarded entirely when calculating council tax reduction under Somerset’s scheme, all Universal Credit income, except the housing element, are taken into account. This means that other elements of Universal Credit, including the disability element, are now treated as ‘income’ and [the claimant] no longer qualifies to have his council tax bills reduced, even though he is receiving the same amount of benefits for the same reason.”

On 9 January 2026, the High Court granted permission for the claimant’s judicial review to proceed on all grounds, including arguments that the scheme is:

• Discriminatory: “It is argued the scheme unlawfully discriminates against disabled people because it treats disability-related elements of Universal Credit as if they were ‘spare income’. This means people whose benefits are increased to reflect disability-related needs are assessed as less in need of support and are required to pay more council tax than non-disabled people with comparable financial circumstances. It also treats people with identical needs and incomes differently based on whether they are receiving ‘legacy’ benefits or Universal Credit.” 
• In breach of the Public Sector Equality Duty: “It is argued Somerset Council failed to properly consider the impact of its scheme on disabled people and other protected groups when designing and operating the scheme, and when making the decision in [the claimant’s] case.”
• Irrational: “It is argued that it is arbitrary and therefore irrational to disregard all the income of someone on legacy means tested benefit, yet to take into account the equivalent disability-related elements of Universal Credit. In the context of a system which requires consideration of financial needs, it is irrational for a person’s entitlement to change radically when their financial needs have not changed.”

The case will now proceed to a full hearing in the High Court, where the lawfulness of Somerset Council’s scheme will be considered. 

The legal challenge follows a similar case in which the High Court quashed Trafford Metropolitan Borough Council’s new Council Tax Reduction Scheme, after finding it was both “unlawfully adopted” and “discriminatory” against disabled people and carers receiving certain benefits.

The claimant is represented by human rights solicitor Carolin Ott and Aurelia Buelens from law firm Leigh Day.

Ott said: “This case raises serious concerns about the way Somerset Council’s scheme operates in practice. Our client’s circumstances and level of need have not changed, yet he has gone from paying no council tax to facing charges of more than £1,000 a year, simply because he was migrated to Universal Credit. 

“The court has rightly recognised that our client’s claim is arguable on all grounds, and we now look forward to the substantive hearing where the lawfulness of the scheme will be fully tested. The case has potential wider implications for many other residents in similar situations whose migration to Universal Credit has impacted their eligibility for council tax reductions.” 

A spokesperson for Somerset Council said: “We are aware of a number of claimants transitioning from the Government's legacy benefits, including Income Related Employment and Support Allowance, to Universal Credit. Such claimants are no longer entitled to receive an automatic element of the financial assistance that receipt of Income Related Employment and Support Allowance offered in relation to their Council Tax payments.

"Although Universal Credit does not offer this automatic entitlement, we operate a Council Tax Reduction Scheme (CTR scheme) which must be designed, consulted upon and implemented in advance of the upcoming financial year. Recognising the concerns that such claimants have, we are undertaking a fundamental review of our CTR scheme to ensure that it remains fit for purpose, inclusive and affordable, and we will be consulting on the scheme in summer 2026 for implementation in April 2027.

"We also operate a means tested Exceptional Hardship Scheme to support the most vulnerable. We have always taken steps to provide support for residents with the greatest need and we would encourage anyone concerned to speak to our teams about the different support packages which may be available to them.”

Lottie Winson