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severely mentally impairedCouncil Tax discounts and the Severely Mentally Impaired (SMI)

A person may be deemed to be ‘Severely Mentally Impaired’ (SMI) for Council Tax purposes in England and Wales. Where this person meets the required criteria then they can be disregarded (not counted) for the purposes of paying Council Tax.

This disregard can lead to a Council Tax discount and, in some cases, the property may become exempt from Council Tax. These discounts can be backdated.

What are the qualifying conditions ?

Each Local Authority must use the definition of Severe Mental Impairment (SMI) as set out in legislation, they have no powers to change this. The actual definition is given under Schedule 1 (2) of the Local Government Finance Act 1992 (LGFA92). This act, which lays out the basic criteria , states that

The severely mentally impaired
2(1)A person shall be disregarded for the purposes of discount on a particular day if—
(a)on the day he is severely mentally impaired;
(b)as regards any period which includes the day he is stated in a certificate of a registered medical practitioner to have been or  to be likely to be severely mentally impaired; and
(c)as regards the day he fulfils such conditions as may be prescribed by order made by the Secretary of State.
(2)For the purposes of this paragraph a person is severely mentally impaired if he has a severe impairment of intelligence and social functioning (however caused) which appears to be permanent.
(3)The Secretary of State may by order substitute another definition for the definition in sub-paragraph (2) above as for the time being effective for the purposes of this paragraph.

The 3 criteria, a – c, must all be met before a person can be disregarded. See below for further information regarding the further condition required under Section 2(1)(c).

The Council Tax definition of ‘Severely Mentally Impaired’ (SMI) is given by Section 2(2).

(2)For the purposes of this paragraph a person is severely mentally impaired if he has a severe impairment of intelligence and social functioning (however caused) which appears to be permanent.

Additional qualifying criteria for the Severely Mentally Impairment (SMI) reduction

Under Section 2(1)(c) of the Schedule given above the Secretary of State made an order that a third qualifying criteria was to be required, in addition to those two criteria given under Section 2(1a) & 2(1b) of the schedule.

This additional criteria is laid out in the Council Tax (discount disregards) order 1992, as amended. Article 3(1) of the order states that

The condition prescribed for the purposes of paragraph 2(1)(c) of Schedule 1 to the Act is that the person in question is entitled to one of the qualifying benefits…“.

A discount can only be given where there is entitlement to a qualifying benefit. The key aspect of this criteria is that a person only needs to be entitled to a qualifying benefit. They do not have to physically be in receipt of the qualifying benefit. This means a person doesn’t need to be actually receiving the benefit providing they can show they would be entitled to the benefit.

A list of the qualifying benefits (as of September 2018) is given below:

  • Incapacity Benefit.
  • Attendance Allowance.
  • Severe Disablement Allowance.
  • The Care Component of a Disability Living Allowance, payable at the middle or highest rate .
  • An increase in the rate of Disablement Pension, where constant attendance is needed.
  • Disability element of Working Tax Credit.
  • Unemployability Supplement.
  • Constant Attendance under a industrial injuries or war pension scheme.
  • Unemployability Allowance under a industrial injuries or war pension scheme.
  • Income Support where the applicable amount includes a disability premium.
  • Incapacity Benefit.
  • The standard or enhanced rate of the daily living component of Personal Independence Payment.
  • Employment Support Allowance (Income Related or Contributory).
  • Armed Forces independence payment.
  • Universal Credit (including an amount due to limited capability for work or limited capability for work and work-related activity)

Does my Doctor have to certify me as Severely Mentally Impaired (SMI) ?

The regulations covering the SMI disregard require that a registered medical practitioner (i.e. a Dr) certifies that you meet the requirement to be disregarded as SMI, that is you have a “severe impairment of intelligence and social functioning (however caused) which appears to be permanent”.

(b)as regards any period which includes the day he is stated in a certificate of a registered medical practitioner to have been or  to be likely to be severely mentally impaired

Your Dr should not be charging for the completion of a form to certify you as SMI. The guidance from the British Medical Association (BMA) states;

To support a claim by or on behalf of a severely mentally impaired person for exemption from liability to pay the Council Tax or eligibility for a discount in respect of the amount of Council Tax payable.

The statement by the BMA refers to Regulation 22 and Schedule 2 of the National Health Service (General Medical Services Contracts) Regulations 2015 which regulates certificates which cannot be charged for.

It should be remembered that even if you meet the definition of having a “severe impairment of intelligence and social functioning (however caused) which appears to be permanent” and this is certified by Dr. you must also meet the other criteria given above before any Council Tax reduction can be considered.

Do I have to have a specified illness to be Severely Mentally Impaired (SMI) ?

No, the regulations do not specify any particular illness to qualify (although some websites do wrongly suggest otherwise). Providing your Doctor believes you meet the definition of “severe impairment of intelligence and social functioning (however caused) which appears to be permanent” then that particular illness is sufficient. Most claimants do suffer from Alzheimer’s, Asperger’s, Autsim or dementia etc. however this isn’t a requirement providing all qualifying criteria are met.

What happens if I’m disregarded  and I’m liable for the Council Tax ?

It depends whether you’re solely liable for the Council Tax on the property or not :

  • If you are the sole adult occupier and liable person you will remain liable for Council Tax purposes however the property may then be exempt.
  • If you are the sole liable person but there are other adults resident you will remain liable for Council Tax purposes.  The value of any reduction would depend on the Council Tax status of the other adult occupiers.
  • If you are a joint liable person then in most cases the other liable parties will become liable and responsible for paying the Council Tax.  The value of any reduction would depend on the Council Tax status of the other adult occupiers.

How much reduction would I get for being Severely Mentally Impaired (SMI) ? Can my property be exempt ?

If all of the adult occupiers of the property are disregarded having a ‘Severe Mental Impairment’ then a property is exempt from Council Tax as per the Council Tax (exempt dwellings) order 1992, as amended. This is called a Class U Council Tax exemption. It should be noted that in some specific cases the Class U exemption may not apply and the maximum reduction can be limited to 50% discount. This can happen even where all the occupiers have a severe mental impairment for Council Tax purposes.

If all of the adult occupiers of the property are not disregarded as ‘Severely Mentally Impaired’ then the amount of the reduction can vary from a 0% to a 100% discount depending on the status of the other occupiers and how many have a severe mental impairment.

Backdating of Council Tax reductions

There is generally nothing in Council Tax legislation which prevent backdating as far back in time as the eligibility criteria for the reduction are met. In some cases however a Local Authority may attempt to limit the backdating. If the Local Authority do not agree to backdate then a dispute would fall under the remit of a Valuation Tribunal and an appeal would need to be made to the Valuation Tribunal Service.

Severely Mentally Impaired (SMI) Entitlement disputes

If a Local Authority disputes entitlement to any council tax reduction then this can fall under the remit of a Valuation Tribunal and an appeal would need to be made to the Valuation Tribunal Service.

 

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This article is solely the view of LGFA92, the Council Tax agents and experts, based on our interpretation of legislation. Your local authority is free to dispute this view. A binding decision may require the intervention of a valuation tribunal.