They have an addressed if they are unemployed they are entitled to job seekers etc and if they have children they are entitled to tax credits and child benefit.
I can understand the tax credits/child benefit but not housing or council tax benefits on an illegal site, surely by charging council tax the building/structure must be legal until proven otherwise? Sounds as though one department failed to talk to the other causing an almighty c*ck up, typical local and national government operating policy.