A severe warning has been given to the company in charge of processing Swindon's benefit claims by the council.
More than 5,000 people are facing delays in housing benefit payments after an out-of-date computer system needed to be replaced in September.
WS Atkins, the contractor which was brought in to process the claims by the council, has produced an action plan to deal with the backlog by the end of March.
There are 5,789 tenants facing delays in payments because of the backlog.
The problems arose because the whole system had to be shut down for five weeks while the computer system was updated.
But at the first ever meeting of the Housing Advisory Forum last night the company was warned that it had to get rid of the backlog as soon as possible.
Borough finance officer Derek Carter said: "We are determined that WS Atkins keeps to its target of March.
"It has been told that there could be severe consequences if this target is not met, not only for the tenants, but for the council as a whole.
"It is our job to make sure that this backlog is dealt with as quickly as possible."
The Housing Advisory Forum which is made up of councillors, officers and members of the Tenants' Voice warned the company that while this backlog existed, tenants will continue to suffer.
WS Atkins has already employed a specialist manager whose role is to focus on the reduction of the backlog.
Six extra agency staff have also been employed to assess the claims and there are plans to employ another five members of staff in the next two weeks.
David Airey, of WS Atkins, which is based at Wat Tyler House, said: "We appreciate that we are not just dealing with figures but the lives of real people.
"Any change of system of this magnitude is bound to cause delays.
"It is a long, drawn out process and we are doing all we can.
"We are as confident as we can be that we will have reached our target of March next year."
Councillor Maurice Fanning (Lab, Pinehurst and Gorse Hill) said: "I have had tenants approaching me in a terrible state because they have had eviction notices through non-payment of rent due to this benefits backlog.
"It is quite unacceptable that the company is affecting so many people's lives like this.
"It better meet this next target and solve this problem or it will get worse."
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article