The problem as far as I can see is that under the new rules, created to stop expenses fraud don't forget, this appears to be perfectly legal. So it's evident that whoever made the new rules didn't make them water tight.
The problem with this is the same as any other thing. The money that can be made by making and enforing the rules is in relative terms small compared to the money that can be made finding a way round the rules be that legally or illegally.