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SMI Discount vs SMI Exemption — Which Applies?

By GetRighted Legal Research TeamLast updated July 2026

Summary

Severe Mental Impairment generates two different levels of council tax relief depending on household composition. The SMI disregard (SI 1992/548 Article 2) removes the person from the resident count, potentially triggering a 25% or 50% discount. The SMI exemption (SI 1992/558 Class E) eliminates council tax entirely when the SMI person is the sole occupant or all occupants have SMI. The distinction turns on who else lives in the property — the same medical condition produces dramatically different financial outcomes.

Disregard vs Exemption

How SMI relief varies by household:

The Disregard Scenario

When an SMI person lives with a non-disregarded adult (e.g., a working spouse), the SMI person is disregarded under Article 2 of SI 1992/548. The spouse becomes the sole non-disregarded adult, triggering the 25% single person discount. The saving is 25% of the standard council tax — meaningful, but not the maximum possible relief.

The Full Exemption Scenario

When an SMI person lives alone — or with another disregarded person (a student, a carer, or another SMI person) — the dwelling qualifies for Class E exemption under SI 1992/558. This means zero council tax. If the billing authority has been charging 50% (treating the household as 'all residents disregarded'), check whether Class E actually applies. The difference between 50% discount and 100% exemption is substantial.

Determining Which Relief You Get

Answer these in order:

  • ✓Does the SMI person live alone? — Class E exemption (100% relief)
  • ✓Does the SMI person live only with other disregarded people (students, carers, other SMI persons)? — Class E exemption (100% relief)
  • ✓Does the SMI person live with one non-disregarded adult? — SMI disregard + 25% single person discount
  • ✓Does the SMI person live with two or more non-disregarded adults? — SMI disregard only (no discount triggered)

Sources

  1. Council Tax (Discount Disregards) Order 1992, SI 1992/548, Article 2
  2. Council Tax (Exempt Dwellings) Order 1992, SI 1992/558, Class E

Frequently Asked Questions

My husband has dementia and I care for him full-time — which relief do we get?
Your husband is disregarded under Article 2 (SMI). You may also be disregarded under Article 3 (carer) if you provide 35+ hours per week and he receives a qualifying disability benefit. If you are both disregarded, the property may qualify for Class E exemption (100% relief) rather than just the single person discount.
We currently get a 50% discount — should it actually be a full exemption?
Possibly. A 50% discount means the council treats all residents as disregarded but has not applied Class E exemption. Check whether Class E applies — if the SMI person is the sole or main occupant, or all residents are disregarded under qualifying categories, the full exemption should apply.
Does it matter whether the SMI person owns the property?
No. The disregard and exemption apply based on residence and medical/benefit status, not ownership. An SMI owner-occupier receives the same relief as an SMI tenant.

Related

  • severe-mental-impairment-exemption
  • class-u-exemption
  • carer-council-tax-discount

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