Falkirk Council has moved to suspend awards of Discretionary Housing Payments (DHP) to housing benefit claimants struggling to pay their rents - but who have not been affected by the Westminster Government's controversial "spare room subsidy" policy.
The local authority, run by a Labour-led coalition with the Conservatives, has said that while it needs more than £1.3 million to mitigate the effects of the bedroom tax in the current financial year, it currently only has £645,000.
Although the Scottish Government has pledged new funds to offset the cut in housing benefit for victims of the bedroom tax, it claims to be in the dark over how much it will get and fears it may not have enough cash for awards to those struggling with rent bills for other reasons.
Under the council's old policy, currently being reviewed, single people under 35 (who get reduced housing benefit), people on low incomes, those in debt and facing homelessness, those with increased housing costs because of illness, and individuals affected by any welfare cut, could all qualify for DHP.
But Falkirk Council has confirmed that 120 applications have been put on hold until the end of September. In a letter sent to affected tenants, it says: "Until our full funding allocation is announced and our policy reviewed, we cannot make payments of DHP to those not affected by [bedroom tax]."
Falkirk Council said it had been told by the Scottish Government that as much of its funding as necessary must be used to mitigate "bedroom tax impacts" as a priority. It will then contact those affected by the bedroom tax to invite them to make a claim and only after that can it decide if it can help others.
A spokesman said: "It is important to recognise that this does not mean that payment has been refused - merely put on hold until we are in a position where we can make a decision … we have directed them to other sources of financial support in the meantime."
Cosla, the umbrella group representing Scottish local authorities, said: "It is up to each council as to how they manage their DHP funding and Falkirk council is exercising a cautionary approach ahead of a further funding announcement."
But the Scottish Government said there was no reason for a cut in support for those unaffected by bedroom tax. A spokeswoman said the Government is providing enough cash for councils this year to fully mitigate the bedroom tax.
"There is therefore no reason why Falkirk Council should cut the £51,456 of support that is available to tenants not hit by the bedroom tax," she said. "Additionally, now that the UK and Scottish Governments have confirmed that the cap on DHPs will be lifted, local authorities are able to add their own funding to cover those tenants."