Council Tax Benefit is to be renamed Council Tax Rebate to encourage pensioners to claim the help they are entitled to. The change is likely to take place next year.
Campaign groups, including the Royal British Legion, are worried that pensioners don't like claiming a 'benefit'.
By renaming Council Tax Benefit as a 'rebate' they hope more pensioners will take up help.
Work and Pensions Secretary Yvette Cooper said: "Changing the name makes it clearer that many pensioners are entitled to this money back on their council tax rather than seeing it as a separate benefit that they may not want to claim.
"This is part of making sure people get proper support and respect when they retire."
The government will now work with local councils, the Royal British Legion and other organisations to work out when the change will take place.