@Shelly84,
According to the "long term stay" policy the guest is not entitled to a refund. So if he cancelled te reservation, there is no refund. If the stay is shortened ( by changing the reservation), the monthly discount will disappear and price probably will increase. It is up to you if you want to provide a refund.
I suggest you should at least earn the money for the period the guest stayed, based on the normal price for such period (no monthly discount). Maybe consider refund for last 2 weeks if you can rebook those weeks.
Best regards,
Emiel