The Severely Mentally Impaired (SMI) Council Tax Discount

The severely mentally impaired (SMI) council tax discount is one of the most underclaimed reductions in the whole system. Anyone certified by a doctor as severely mentally impaired, and entitled to a qualifying disability benefit, is disregarded for council tax: living alone they pay nothing, and a household with one other adult gets 25% off. Claiming is free, the GP certificate is free, and councils can backdate awards, in some reported cases by five figures.

A note on the name. "Severely mentally impaired" is the label in the Local Government Finance Act 1992, and it is the term councils and application forms still use, so this guide uses it too. The government confirmed in April 2026 that the disregard will be renamed; that change, and the standardised application form that comes with it, are covered below.

What is the severely mentally impaired council tax discount?

It is a disregard, not a means test. Council tax assumes at least two adults per home; a person who meets the SMI test is removed from the adult count entirely, which reduces or wipes the bill depending on who else lives there. Entitlement rests on a two-part test set out in Schedule 1 to the Local Government Finance Act 1992:

1. A doctor's certificate. A registered medical practitioner (usually the GP, though a hospital consultant can also sign) certifies that the person has "a severe impairment of intelligence and social functioning (however caused) which appears to be permanent". That statutory wording, not any particular diagnosis, is the legal test.
2. Entitlement to a qualifying benefit. The person must also be entitled to one of a prescribed list of disability benefits, such as Attendance Allowance or Personal Independence Payment. The common ones are listed below.

Both parts are needed. A diagnosis alone is not enough without the benefit entitlement, and receiving a disability benefit is not enough without the certificate. Together they make the person invisible to the council tax count, in the same way full-time students are.

What conditions count as severely mentally impaired?

There is no fixed list of conditions, because the legal test is the doctor's certificate, not the diagnosis. Conditions that are commonly certified include dementia (including Alzheimer's disease), severe learning disabilities, and the lasting effects of a severe stroke or brain injury. These are examples, not criteria: what matters is that a doctor confirms a severe and apparently permanent impairment of intelligence and social functioning, however it was caused.

Two practical points follow. First, an early diagnosis does not automatically qualify: the doctor must be able to certify that the impairment is severe and appears permanent, which with a progressive condition may come later than the diagnosis itself. Second, a condition missing from every example list can still qualify if it meets the statutory wording. If you are unsure, ask the GP. Certifying is a medical judgement, and the certificate costs nothing.

Which benefits qualify for the SMI discount?

The second half of the test is entitlement to a qualifying benefit. According to MoneySavingExpert's guide to the discount (updated 2 June 2026), the most commonly relied on are:

• Attendance Allowance (the usual route for people over State Pension age)
• Personal Independence Payment
• Disability Living Allowance
• Universal Credit with a limited capability for work element
• Income Support with a disability premium
• Incapacity Benefit

The full statutory list is longer and includes several legacy benefits, so if the benefit you receive is not shown here, do not assume you miss out: gov.uk's guidance is simply to confirm eligibility with your local council. The law asks for entitlement to the benefit, and councils normally accept the award letter as proof.

How much is the SMI council tax discount worth?

The outcome depends on who else lives in the property, because the discount works by removing the disregarded person from the adult count:

In cash terms the stakes are real. The average Band D bill in England is £2,392 for 2026/27 (MHCLG, 25 March 2026), so a 25% discount is worth about £598 a year and a full exemption wipes the whole bill. And because entitlement often began years before anyone claims, the backdated refund can be worth far more than the annual saving.

How do you apply for the SMI discount?

You apply through the council that sends the bill, and every council currently uses its own form. The process is broadly the same everywhere:

1. Get the council's SMI form. Search your council's website for "severely mentally impaired discount", or start from gov.uk's apply for a Council Tax discount page, which routes you to the right council.
2. Ask the doctor to complete the certificate. Usually the GP, sometimes a consultant. The certificate is free: GPs cannot charge for it.
3. Attach proof of the qualifying benefit. The award letter is the standard evidence.
4. Ask for backdating in the same application. State the date the person became entitled and ask the council to backdate to it. The doctor can state on the certificate when the impairment began, which may be earlier than the certificate date.
5. Apply on the person's behalf if needed. Councils accept applications from family members, carers, and attorneys.

From a date yet to be set, a standardised national application form should replace the hunt for each council's own paperwork; see the rename section below.

How far back can the SMI discount be backdated?

In England and Scotland, as far back as the council decides: there is no statutory time limit, and each council sets its own backdating policy, so awards range from the date of claim right back to the start of entitlement. Wales is standardised: every Welsh council backdates the discount to the date the person became severely mentally impaired, which can be earlier than the date the diagnosis was actually made. Wherever you live, claim for the full period and evidence it.

The sums involved are why this matters. MoneySavingExpert's reporting on the discount (updated 2 June 2026) includes a £15,000 backdated refund for a 98-year-old with vascular dementia and a £20,000 refund covering 2007 to 2017, evidenced with bank statements. Those are the exceptional cases rather than the typical ones, but they show councils do pay out over long periods when the evidence supports it. Our backdated refunds guide explains how council tax refunds are calculated and paid.

Is the SMI discount being renamed?

Yes. In Council Tax Information Letter 3/2026, published on 15 April 2026, the government confirmed it will change the name of the disregard "when parliamentary time allows", after consultation responses said the current label is outdated and puts people off claiming. The same letter commits the government to working with councils and disability charities on a standardised application form, which councils will be expected to consider alongside their own processes. As of August 2026 no date has been set for either change, so for now you apply under the existing name using your council's own form. Nothing about the entitlement itself is changing: the two-part test and the discount levels stay exactly as described above.

One honest closing point. The SMI discount is free to claim through your council, and no company should charge you to claim it. The same logic applies to the council tax band the bill is built on: every discount is a percentage of the band charge, so if the band is wrong you are still overpaying on the discounted bill. Checking your band against your street is free with our postcode checker, the official challenge through gov.uk is free, and Council Tax Challenger's optional £9.99 evidence pack only adds the comparable-property analysis if you decide the case is worth making. Our discounts and exemptions guide covers everything else you may be able to claim alongside SMI.