More than 600 former MG Rover workers are being offered a four-month holiday from paying council tax.
Bromsgrove District Council, which takes in part of the sprawling Longbridge site, said it would suspend payments for former employees who were struggling to make ends meet following redundancy.
Kevin Dicks, corporate director of resources, said the local authority wanted to do all it could to help former MG Rover workers who found themselves without a job.
"There are over 600 ex-Rover workers living in the Bromsgrove District," he said.
"We hope that by suspending this payment it will be of some benefit to those affected during this difficult time."
The news came on the same day the Government was urged to reconsider the funds it was making available to help retrain MG Rover workers.
This followed a new report which argued more money would be needed to help the 5,000 ex-employees find new jobs.