AROUND 200 households in Cornwall are to receive rebates after being wrongly made to pay ‘bedroom tax’.
The social housing tenants mistakenly had benefits cut because they have extra bedrooms and will receive an average of £610 each.
Since April last year tenants with one spare bedroom faced a benefit cut of 14 per cent, while those with two or more spare rooms were looking at a 25 per cent reduction.
But a legal loophole meant the ‘under-occupancy penalty’ should not be applied to tenants who had been continuously claiming housing benefit from before 1996 and had lived at the same address.
The loophole was recently closed by the government, which is now working with Cornwall Council to provide the rebates.
Council benefits officer Ian Stephens told the BBC the penalty had caused some tenants "great stress".
The authority will still be out of pocket, despite the facts that rebates paid out will be reimbursed by the government.
He said: "We've had to put members of staff on this task who we've had to take off other functions and services, so there has been a cost to the council in this respect."
The Department for Work and Pensions said it expected comparatively "very few" households to be affected by the rebates and it was working with the council to ensure affected claimants were kept informed.
Similar rebates have been issued by other councils in England, including Merseyside and the West Midlands.