Definite libel and defamation of character there. Stupid woman.
I suggest you call in at Citizens Advice Bureau for some FREE legal advice....taking a printed copy of the email/webpage.
...Plus any receipts for the rent you paid, etc.
Also, get straight on to the free benefit fraud line and ask them to check up on her.
She should certainly have been paying extra council tax, if there was more than one adult in the house, so you can call your local council's benefit fraud line too.