Up to 2,100 people who were wrongly charged the ‘bedroom tax’ in Birmingham could receive a rebate after the Government made an error drafting legislation.
But the cash-strapped city council has been left to clean up the mess by identifying the tenants affected and ensuring they receive the money owed.
It means officials are forced to comb through records dating back to 1996, before they were computerised, to try to work out who requires a refund.
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Since April last year, social housing tenants claiming housing benefit faced a benefit cut of 14 per cent if they had one spare bedroom, and 25 per cent if they had two or more under a policy known as the under-occupation penalty, dubbed the bedroom tax by critics.
But it emerged in January that a loophole in the current law means that many tenants who have claimed housing benefit at the same property non-stop since 1996 are exempt.
Birmingham City Council believes up to 2,100 households in the city could be affected.
Bromsgrove said up to 15 could be affected, Lichfield said up to 18 could be affected and Solihull said up to 22 could be affected.
The figures were provided by the local authorities in response to Freedom of Information requests from the Labour Party.
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Work is continuing to identify exactly who has been wrongly charged.
Coun John Cotton, Birmingham’s Cabinet member for Social Cohesion and Equalities, said: “This probably shouldn’t surprise anyone. We’ve known all along that the bedroom tax was a rushed and ill-conceived policy.
“We are in the process of identifying both the council tenants and the tenants of Registered Social Landlords in Birmingham that meet the criteria.
“It will, of course, mean good news for some households but dealing with this represents an administrative nightmare for councils that could easily have been avoided.”
Ministers have introduced new regulations to close the loophole, but Labour is to oppose this in the House of Commons.