More people could be eligible for a refund on the bedroom tax following further clarification about the loophole debacle from the Department for Work and Pensions.

The government initially issued guidance which stated that people who had been in a property prior to 1996 and continuously entitled to housing benefit were exempt from paying the controversial under-occupation penalty, along with those who inherited tenancies from their partner following their death.

It has now provided further information to local authorities which explains the exemption also applies to other family members or relatives who took over a tenancy when the original tenant left.

To qualify the previous tenant must have left the dwelling, been imprisoned or died and the relative or family member must have claimed housing benefit within four weeks of this happening.

Even though the loophole was closed on March 4, councils have been asked to contact social landlords to ensure that they provide the Benefits Service with details of any tenancies which may be affected and examine their own records to help identify any cases.

Commenting on the latest twist in the bedroom tax saga, Mayor of Liverpool Joe Anderson, said: “We have rightly committed to supporting any Liverpool resident wrongly affected by this government error, to make sure they get back every penny they are entitled to.

“I have been delighted with the willingness of our social landlords to work with us to identify exempt tenants. We have already refunded many people, and if anyone thinks they may be eligible under the revised guidance then I would urge them to come forward.

“The government’s welfare reforms are having a devastating impact on the poorest and most vulnerable people in our society.”

More than 1,300 people in the city - and thousands across the country - have already received awards, typically of £560 or more per claimant.

The government’s under-occupation penalty sees benefit reductions of up to 25% for working age social housing tenants who are deemed to have more bedrooms than they need.