As many as 40,000 people could be wrongly asked to pay bedroom tax, due to a mistake made by the Department of Work and Pensions.
The estimated number of those potentially affected, according to housing experts, is wildly higher than the figures issued by the department which says that approximately 5,000 tenants will face problems.
The error has already forced some tenants to move to a smaller property, while others face eviction. It affects working age tenants in council housing, who have occupied the same home continuously from 1996.
The mistake occured when the housing benefit regulations dating from 1996 failed to be updated by the department, when the bedroom tax legislation created under the Welfare Reform Act 2012.
The bedroom tax does not affect private sector tenants and the coalition government has estimated that 660,000 households will see their benefits cut. The policy currently inflicts a charge of between £14 and £22 a week on those deemed to have a "spare" bedroom.
Designed to combat under-occupancy in social housing, the government maintained the tax would encourage people to downsize and help reduce the £23bn annual bill for housing benefit. It was also argued the policy would expand living space for larger families.
The scheme has been condemned by housing charities, with warnings of increased homelessness.
Chris Bryant, Labour MP for Rhondda, recently criticised a Conservative MP for suggesting the bedroom tax should be extended to pensioners.
On the error, he said: "This is the latest example of the chaos and confusion within the Department of Work and Pensions under Iain Duncan Smith.
"Rather than closing loopholes in the policy, the government should scrap their hated bedroom tax. If they don't, the next Labour government will."