According to the current Council Tax Regulations, UC Transitional Element (TE) is being treated as unearned income for the purposes of calculating Council Tax Reduction eligibility.

Even if transitional protection (TE) is a temporary top-up to stop people losing money when they move to Universal Credit, it still counts as income for Council Tax Support. As a result, the Council Tax Bill increases and people will need to contribute more to the amount of Council Tax they have to pay. In some cases, they lose their CTR all together after they moved to UC.

This is contrary to the purpose of Transitional protection to ensure people remain, at least temporarily, in the same position as they were prior to a migration. 

Recently, the legislation governing Council Tax Reduction has been amended to ensure that when a person moves from a legacy benefit to UC transitional element will not be counted towards any unearned income in calculating their entitlement to CTR The Council Tax Reduction (Miscellaneous Amendment) (Scotland) (No. 5) Regulations 2025.  It will be in force from 10th November 2025. The legislation doesn’t apply to cases before 10 November.