Hundreds of people in Wolverhampton have been wrongly sent a bill for council tax even though they are exempt.
Changes coming into effect next month mean that 20,444 working age people face paying an average of £73.73 a year towards their council tax, when previously they had the bills paid by the Government.
Pensioners are meant to be exempt but Wolverhampton City Council has acknowledged it sent bills to 500 people who should not have received them.
New bills will now be sent out clarifying that those who are eligible for support will continue to get it. It comes following a Government decision to cut some of the funding it gives local authorities for council tax benefit.
Councils have been left to their own devices to decide how to administer. Some, like Walsall and Dudley, have decided to absorb the cut and provide council tax benefit for another year.
Wolverhampton City Council has decided to absorb some of the cut but will require working age people to pay at least 8.5 per cent of their bill, following the loss of £3.2m of government support.
Even passing on the cut will still leave the council £1.9m worse off because it will raise only £700,000 from the benefit claimants and will get a £600,000 Government grant to cap its demand at 8.5 per cent. It comes as the council has to save £60m over the next five years.
Council spokesman Tim Clark said: “Council tax bills were sent to 106,000 households in the city last week. We are aware of just over 500 that have gone out to people who should not have had them.
“Eligibility for the new council tax reduction scheme was worked out based on the information we already had. That means in a small number of cases the information we had was not up to date. Anybody who thinks their bill is wrong should contact City Direct on 01902 551166.”
Welfare reforms, including council tax benefit and the removal of either 14 or 25 per cent of housing benefit for tenants with spare bedrooms, will result in claimants in Wolverhampton losing out on £34.4m over the next three years, according to a council study. It is claimed the amount spent in city shops and businesses will drop by £4.75m over the next year as well.