A mistake in paperwork means Sheffield residents could have been wrongly hit by the bedroom tax.
Sheffield Council has stepped up efforts to find hundreds of tenants who could have been penalised unfairly, having their housing benefit reduced by up to 25 per cent since the Government’s spare room subsidy was brought in last year.
They are working with landlords to identify people who could have the right to appeal after the Department for Work and Pensions announced an error in the original draft legislation.
The latest news means tenants are exempt from the penalty if they have been continuously entitled to housing benefit at the same property since January 1, 1996.
Coun Harry Harpham, council deputy leader and cabinet member for homes and neighbourhoods, said: “We always said this tax was always going to hit those who could least afford it; those on the breadline who were struggling to make ends meet.
“With the cost of living sky-high we need to do all we can to assist those who most need their help.
“In our view it is an ill-thought-out tax.
“We are taking action to deal with it and standing up for local people, who shouldn’t have to pay this.
“Now the Government say they are looking at the legislation again after admitting they made a mistake.
“However, in our view this is too little too late.”
Council steps include identifying those who have had their housing benefit reduced when it should not have been due to Government errors.
Non-council social landlords have also been asked to identify their tenants who they believe meet the criteria that would allow housing benefit to be reinstated.
The council said that exemptions are not expected to apply to the majority of tenants.