More than 600 people in West Lindsey will see their housing benefit cut because they have one or more spare bedrooms.
New under-occupancy laws, coming in on April 1, affect people living in social housing who are claiming housing benefit.
So far, West Lindsey District Council has identified 680 households who will be hit.
There are 544 homes that have one spare bedroom and will see a 14 per cent benefit cut.
And there are 150 with two or more spare rooms that will see a 25 per cent cut in housing benefit.
WLDC prosperous communities committee chairman Coun Malcolm Parish said: “We understand how these changes could have a significant impact on hundreds of people in West Lindsey.
“That is why we are in the process of contacting all the families to advise them that they will be affected.”
The changes will not affect pensioners and there are exemptions, including people living in temporary accommodation.
Council tax benefit changes - as previously reported in the Rasen Mail - will also come into force on April 1.
This will affect more than 3,000 households, who will have to contribute more towards their council tax bill.
For more information call 01427 676565.