Households in bands A-D will be eligible for the rebate and the payments will be processed locally by Lancaster City Council but only those paying council tax by direct debit will receive it automatically.
Lancaster City Council said 37.69% of people who pay council tax (22,141 households) do not pay their council tax by direct debit.
These households across Lancaster and Morecambe currently pay council tax manually meaning they will have to apply to receive the rebate.
These residents either pay their bills by visiting their council’s website every month or make their payments by phone.
There is no set deadline for setting up a direct debit in order to get the £150 automatically.
This depends on how councils run the payment process locally.
A Department for Levelling Up, Housing and Communities spokesperson said: “Direct debit is the quickest and easiest way to pay council tax, and the best way for most people to get the rebate.
“Eligible households who don’t pay their council tax by direct debit will be invited to make a claim.
“Councils will be reimbursed for their administration costs.”
Councillor Anne Whitehead, cabinet member with responsibility for finance at Lancaster City Council, said: “While we have yet to receive the full details from the Government on how the rebate scheme will work, we expect that anyone paying by Direct Debit will receive it directly into their bank account.
“For those who aren’t on Direct Debit it’s likely there will be an application process which will slow down payment.
“If you do not currently pay by Direct Debit, but can change, I urge you to make that change. This will allow us to pay the rebate to you quickly and reduce the number of people for whom we have to make special arrangements. Switching to Direct Debit will speed up the process for you and everyone else.
"We also understand that there will be discretionary funding to help low income households in higher bands and also those who do not pay council tax.”