At least one in ten people affected by the so-call bedroom tax in Waltham Forest have wrongly had their benefits cut, it has emerged.
A recently discovered loophole in housing benefit reform legislation, which cut payments to those judged to have an unused spare room, means tenants who rented properties from a housing association or council since January 1 1996 or before are exempt.
It has emerged that 146 of the 1,503 people affected by the changes in Waltham Forest, introduced at the start of the year, should not have had their benefit cut.
These people have yet to be notified by Waltham Forest Council, which admitted more could have had their benefits incorrectly reduced.
The changes are part of sweeping reforms to the benefits system devised by Chingford MP and Secretary of State for Work and Pensions, Iain Duncan Smith.
Mr Duncan-Smith told the House of Commons yesterday the ‘technical issue’ will lead to ‘fewer than 5,000 people being affected’.
A council spokesman said identifying those wrongly penalised was at the “very early stages”.
“The council will ensure those affected are re-assessed shortly and any extra housing benefit will be paid in full by the DWP,” he added.
“No-one has actually been re-assessd or contacted about the issue yet.
"The exercise is ongoing and we expect to identify additional cases later as we work through all the cases that have had a restriction applied.”
A DWP spokesman said: "We are looking at this issue carefully and working with local authorities, and we will take any necessary action in due course.
“We expect very few people to be affected.”
It was revealed that grandmother Stephanie Bottrill, who referenced the “bedroom tax” in a suicide note before taking her own life, was exempt from the subsidy.
Philip Connelly, of Disability Rights UK, is calling on the government to abolish the tax.
He said: "I am calling on the government to repeal this tax, it is discriminatory and the DWP should go back to the drawing board.
"Up to 70 per cent of families affected by the bedroom tax have a disabled child - it needs to be abolished."