Veronica Kenning, 57, has been served with a notice of possession order by the council because of the arrears she owes but says "they will have to wait for me to die".
Mrs Kenning, who lives alone in a three-bed terraced house in Shard End, Birmingham, has turned down all offers of assistance from Birmingham City Council, which sent the notice, including the chance of a discretionary payment.
Having been diagnosed with oesophageal cancer in August last year, she was given 12 months to live after opting for palliative care rather than aggressive treatment.
Mrs Kenning, who has also suffered with ME for more than 20 years, said she is ready to die and has the support of her family, but is taking a stand against the subsidy "on principle".
With two rooms to spare in the home she has lived in for 26 years, Mrs Kenning was first fore-warned in February that she would have to pay an extra £23.57 per week extra in what some have branded the "bedroom tax".
"I call them up every week to ask how much I am owing, just to let them know I am still here," she said.
Mrs Kenning then had a repossession notice with a threat of possible court action in a letter sent by the council, when her arrears were at £188 - they now stand at more than £400.
The council said it was "sympathetic" to Mrs Kenning's situation and had telephoned, written to, and visited her to "urge" her to apply for a discretionary payment since sending the notice, but she has refused all offers of help.