'Up to 40,000' people wrongly identified as eligible for 'bedroom tax' – and may have already been forced to move

Up to 40,000 people could have been wrongly identified as eligible for the so-called 'bedroom tax' (Peter Macdiarmid/Getty Images)

Up to 40,000 people could have been wrongly identified as eligible for the so-called “bedroom tax”, according to a report.

Some of those affected by an error by the Department of Work and Pensions (DWP) may have already moved to a smaller home or be facing eviction, The Guardian reported.

A loophole in the legislation for the “spare room subsidy” - as it is officially called - means docking benefit payments for some social housing tenants was not legal.

The DWP, which plans to close the loophole, estimated 5,000 people were affected, but housing experts said it could be up to 40,000.

They could now be entitled for refunds of hundreds of pounds. People given emergency housing funding to cope with the shortfall may get refunds and therefore actually profit from the mistake.