Single mother Alison Meekison was horrified when she received a letter from West Oxfordshire Housing telling her it was starting to repossess her home.
Miss Meekison, 30, has lived in Blakes Avenue, Witney, for three years with her two children Kieran, seven, and Bethany, four.
The house used to be owned by West Oxfordshire District Council but the authority's housing stock was taken over by West Oxfordshire Housing earlier this year.
"The letter stated it was the first stage of repossession and I would have to go to court," she said.
"When I rang West Oxfordshire Housing I was told to ignore the letter because it had been sent out because of delays in paying my housing benefit.
"It gave me a nasty shock. I know at least one other person it has happened to.
"I don't think I deserve this sort of letter just because of a back-log in paying housing benefit. If it could happen to me it could happen perhaps to an elderly couple who could be really upset."
Housing benefits are assessed and paid through West Oxfordshire District Council.
The council's director of finance, Vic Allison, said: "We do apologise. There are checks between us and West Oxfordshire Housing to see if there are delays in housing benefit in which cases letters like this should not be sent but this one seems to have slipped through.
"We have had a problem on the housing benefit side but we are getting on top of it. The Government is determined to cut down on fraud and the checks we have to do are increasing our workload."
The Oxford Mail has published several articles in recent weeks about people receiving eviction notices because of housing benefit claims.
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