Two possible grounds of review/appeal against bedroom tax

A technical question:
A few people in Manchester have put in appeals against being subject to the bedroom tax on the basis of room size, or room use. But they have found that the 1996 exemption might also apply to them. So, they can apply for exemption under the 1996 exemption, in addition to the appeal.
  Manchester council have written to everybody in this situation to say that they will not produce papers or deal with the appeal until the 1996 issue has been investigated.

My opinion on this is that no council has the authority to refuse to deal with somebody’s appeal, and that these are two separate issues that should be dealt with separately. The 1996 exemption will only last until (so far) 3rd March this year. If somebody can claim the BT doesn’t apply to them for a reason such as room size or room use, this would extend beyond 3rd March.

My co-campaigners in the local Anti-BT campaign think they would like to wait for a decision on the 1996 issue, and if Manchester council then says the appeal on other grounds has lapsed because they have been granted an exemption, put in the appeal again and start again.

We’re not sure which method is legally correct or tactically the best.
So, what do other people think?

I can see why under normal circumstances you would object to the Council obstructing the progress of an appeal, but these are not normal circumstances: the 1996 route is going to end up being a quicker and easier solution for those affected and I think it makes sense for the Council to prioritise that, then only submit appeals to the Tribunal on alternative grounds in those cases where it is still necessary.

Any appeal against the original April 2013 decision will definitely lapse if the claimant is found to be covered by the 1996 exemption because it will clearly have been revised in the claimant’s favour.  There will then be a new superseding decision from 3 March attracting a fresh right of appeal on the underlying alternative grounds (and another one from year-end as well, come to that).