More than 10 percent of households hit by the bedroom tax could be exempt according to Merseyside housing consultant Joe Halewood.
The government has been forced to admit the existence of a “loophole”.
It exempts anyone who has been in their home continuously since before 1996 and in receipt of housing benefit the whole time.
It can also apply to people who have stopped receiving housing benefit for one gap of less than four weeks. And for people who have been forced to move by circumstances beyond their control.
This explicitly refers to incidents such as fire or floods.
But Joe believes it could also apply to women fleeing domestic violence or people whose homes were demolished.
He stressed that councils won’t be able to take back any discretionary housing payment they have paid.
The Department for Work and Pensions (DWP) says that up to 5,000 households are affected.
But housing providers in some regions say it covers well over 10 percent of their tenants.
That means the total could be as high as 60,000.
“The DWP is keen to downplay this, to say it’s a small number” said Joe.
“Its top estimate is 5,000 households, or 0.9 percent of claimants. But their figures say that 0.7 percent of benefits are claimed fraudulently—so how can they say fraud is a huge problem and this is small?
“The answer is, they can’t.”
Benefits minister Lord Freud has said he will try to retrospectively change the law to eliminate the loophole—if there is parliamentary time.
Any new secondary legislation would first have to go through a cross party committee and then a debate in parliament.
And it would bring massive exposure to the DWP’s incompetence in the run-up to council and general elections.
The 1996 rule still leaves around half a million people hit by the bedroom tax.
And it comes a little late for those who have already been evicted or forced to move. But many of these tenants may be able to sue for compensation.
And it can be another nail in the coffin of this hated policy.