Households that rely on welfare payouts could benefit Members of the Housing Authority will today consider options for complying with a court judgment on the rents charged for public housing tenants. It is expected these options will include allowing the 120,000 households that rely on welfare payments to live rent-free. They comprise one-fifth of tenants. The Court of First Instance ruled last July that the authority breached its statutory duty to conduct regular rent reviews. It ordered the authority to cut rents to comply with the Housing Ordinance, which says they must not exceed 10 per cent of the median income of tenants. The rent-to-median-income ratio was 13.8 per cent when the court made the judgment, and now stands at 14.2 per cent. The authority is appealing against the ruling and the case will be heard in the Court of Appeal on April 20. It is understood that the ratio would fall significantly if welfare recipients were exempted from paying rent. The move will not affect government finances as the Social Welfare Department now pays rent for welfare recipients. Social rights activist Ho Hei-wah, who is also a member of the authority's subsidised housing committee, warned of possible further legal action if the majority of tenants fail to benefit from the 'tricky' rent reduction. 'Housing officials told us it was even possible there would be room to increase rents if they excluded the welfare recipients. By doing this, the rent to income ratio will drop dramatically to about 9 per cent,' Mr Ho said. An authority spokesman said no final decision would be made after the meeting but it would decide on its action before the appeal hearing begins.