Answer: Council tax benefit is a means-tested benefit that helps people on a low income pay their council tax. The means test compares how much money claimants have against the amount the government sets for the basic living allowance (applicable amounts). The living allowance figure varies depending on individual circumstances. Claimants who are entitled to benefit have their council tax bill reduced by the amount of their benefit. It is currently administered by local councils using rules set nationally and is fully-funded by government.