Anyone Who Has Claimed Housing Benefit Since Before 1996 Is Exempt From The "Bedroom Tax"

The government has admitted to a flaw in one of its flagship policies.

A loophole in the government's "bedroom tax" policy means that people who have continuously claimed housing benefit at the same property since 1996 are exempt.

Toby Melville / Reuters

The policy involves reducing benefits payments to residents of council or housing association properties if the government believes they more bedrooms than required.

The policy is designed to encourage council tenants to downsize and increase the supply of large flats and houses for new applicants. Having one spare room reduces the amount of of rent covered by housing benefit by 14%. Two spare rooms sees the benefit reduced by 25%.

But the government yesterday issued an official circular in which it admits making a mistake that affects long-term tenants. This means thousands of people could have had their housing benefit payments wrongly reduced.

The department now admits that anyone who has continuously claimed housing benefit for the same house since 1st January 1996 is exempt from the bedroom tax.

This is a regulatory mistake that affects a small number of people who have been in continuous receipt of housing benefit at the same address since 1996. Someone's made a mistake while drafting the law.

However, the government pledges that it will "be taking steps to remedy this shortly".

The circular also says that is possible that some people have inherited this exemption from the bedroom tax by taking on the lease.

Local authorities who have applied the bedroom tax to long-term housing benefit claimants are told to repay the deductions.

Repaying the bedroom tax for the 8 months back to April 2013 could be worth hundreds of pounds to some tenants. And cost the government several million pounds.