A devoted follower of money-saving expert Martin Lewis has shared a remarkable financial victory, securing a council tax refund of nearly £6,000 after acting on advice from the consumer champion's BBC podcast.
The Life-Changing Council Tax Discount
The caller, named Mike, explained that his elderly father has vascular dementia. After hearing Martin Lewis discuss potential council tax discounts for those with mental incapacity, Mike investigated and successfully applied for the Severe Mental Impairment (SMI) discount. This resulted in a 100% discount on his father's annual council tax bill, worth around £2,000, on top of an existing 25% single occupancy discount.
Most significantly, the local council agreed to backdate the discount for nearly five years. Mike received a direct payment of £5,989.30 into his father's bank account. He described the windfall as a "lifesaver," highlighting how crucial it is with rising carer costs and other bills.
What is the Severe Mental Impairment Discount?
Martin Lewis has long campaigned to raise awareness of what he calls a "hideously under-publicised" council tax rule. The SMI discount can apply to someone with a severe impairment in intellectual and social functioning, such as that caused by conditions including:
- Alzheimer's disease and other forms of dementia
- Severe strokes
- Advanced Parkinson's disease
To qualify, the person must also be eligible for certain disability benefits. If eligible, they are disregarded for council tax purposes. This means if they live alone, they pay no council tax, similar to an all-student household. If they live with one other adult, that household receives a 25% single-person discount.
A Postcode Lottery on Back Payments
Lewis expressed frustration that the rules for backdating refunds are not uniform across the UK. "Backdating is council by council," he stated. While Wales has standardised its system, in England and Scotland whether you receive past payments depends on your individual local authority's policy.
The finance expert confirmed he has campaigned on this issue at the highest levels, having met with then-Deputy Prime Minister Angela Rayner. He explained that officials are consulting on standardising application forms, guidance, and back-payment rules for the SMI discount across England and Scotland.
With an estimated 980,000 people living with dementia in the UK, Lewis argues that properly applying this discount could have a massive financial impact on hundreds of thousands of households, providing vital support during challenging times.
