Hundreds will get bedroom tax payouts

The loophole has revealed residents who have lived in the same house for more than 17 years and continually claimed housing benefit have wrongly paid the subsidy.

More than 550 social tenants in the region are already expected to have been affected and could now receive hundreds of pounds back. It is believed residents are in line for an average of £650. A change in policy is now due to be introduced by the Government next month.

The bedroom tax, also referred to as the spare room subsidy, sees housing benefit cut if people have unoccupied bedrooms.

Council benefits officers say around 300 households in Sandwell and 200 in Walsall could be due a refund from the Government.

Stafford Borough Council said 20 people have been identified as being affected while across Cannock Chase District Council say there are 31 households that could be entitled to money back.

Wolverhampton City Council officers are currently looking through records to identify households that might be exempt, with Dudley Council also saying although they are aware of cases they are also looking into the exact number.

Councillor Chris Towe ofWalsall Council said: "Councils all over the country have been advised that some people will be entitled to refunds, so our priority is to identify those residents to ensure they get their money back as quickly as possible. We are currently going through our old records to see if people meet the criteria as laid down in the regulations."

Officers in Walsall have processed eight cases which concern overpayment of just over £5,100.

Sandwell Council's deputy leader and cabinet member for strategic resources, Councillor Steve Eling, added: "We estimate roughly 300 people living in council and social housing in Sandwell will be due a refund and we'll be expecting the government to meet the full costs."

There have been calls for the controversial welfare policy to be axed. One of those campaigning, Walsall councillor Pete Smith, said: "The sooner this dreaded bedroom tax is scrapped altogether, the better. Not only is it an unfair and an unjust tax, it just is not working."

The Department for Work and Pensions say it believes there are fewer than 5,000 cases nationally and regulations will be rectified next month.

Spokesman Steve Milne, said: "We expect very few people to be affected by this issue and we are working closely with councils so claimants are informed if they are impacted."