Victims of historic miscarriages of justice have been told by the government they must have “bed and board” costs for the time they spent in prison deducted from their compensation payments.
Last year the Conservative Justice Secretary, Alex Chalk, scrapped the policy of making such deductions from all future payouts.
That followed the high-profile case of Andrew Malkinson who was wrongfully imprisoned for 17 years.
The issue of past cases was left undecided.
But the government has now said people who have already had payouts cannot claim back money retrospectively.
Among those who have been told they will not be refunded money docked from their compensation payments is Paul Blackburn.
Aged 15 he was wrongfully convicted of the attempted murder of another boy and he spent 25 years in prison.
The Court of Appeal said police had fabricated evidence.
When he received compensation in 2011, more than £100,000 was deducted to cover rent and food costs he would have had to pay if he had been a free man.
Last year, after outrage over the case of Mr Malkinson, the policy of clawing back money was stopped.
Some involved in historic cases said it should apply to them too.
But the government has written to Mr Blackburn’s solicitors to say it is an established principle that changes in policy do not apply retrospectively, so he and others cannot claim back money already deducted.
Mr Blackburn says that is “morally wrong” and his solicitors may bring a legal challenge.
“It’s just compounding things isn’t it?” he told BBC Radio 4’s Today programme.
“Just do the right thing. Just put things right.”
He explained that his compensation was also calculated on the assumption that he would never have worked and would have received benefits.
“That’s punishing me twice,” he said. “I had no employment record because you stole my life.”
The BBC understands the previous justice secretary who originally decided to change the policy, Mr Chalk, was still considering what to do about historic cases at the time of July’s election and trying to understand the scale of the compensation payouts that might follow.
Labour peer Lord Falconer, who served as justice secretary under Sir Tony Blair, said the current situation was an “absolute outrage” and the government should pay back deductions in cases where compensation had already been settled.
Matt Foot, co-director of legal charity Appeal, described the previous compensation deductions as “vindictive”.
He told the Today programme there are “relatively low numbers” of people in the same situation as Mr Blackburn and the amount of money they are seeking compensation for is “relatively small”.
A Ministry of Justice spokesperson said: “Financial awards made after 6 August 2023 as part of the Miscarriage of Justice scheme will not have saved living expenses deducted.
“However, in line with the standard approach to changes in government policy, the change announced last year does not apply retrospectively.”
Mr Malkinson, whose case sparked the policy change, served nearly two decades in prison for a rape he did not commit and was formally cleared by the Court of Appeal last July.
He has called for an overhaul of the jury and appeals system to give wrongly convicted people more protections.
Mr Malkinson said that even with the living costs rule removed, he expected to wait two years for any compensation while the independent board which determined how much he was entitled to made its decision.
Calling for the system to be speeded up and requirements to be simplified, he said: “It’s a silly barrier that’s been artificially erected… it’s inexcusable. It’s not justified.”
A House of Commons library document from 2015 describes compensation as “the exception rather than the rule” in miscarriage of justice cases.