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The government has been defeated by peers again on its welfare reform bill, this time over a proposal that was set to punish disabled people in social housing who have spare bedrooms.

The bill returned to the Lords last week through the process known as “​ping pong”​, in which MPs and peers try to reach agreement over the final few amendments to a piece of legislation.

Opposition and crossbench peers secured several minor concessions to the bill, which eased concerns about some of the more controversial cuts to disability benefits.

But the most significant success came when Labour and crossbench peers combined with six rebel Liberal Democrats to push through an amendment that would exempt disabled people and other groups from a proposal to cut the housing benefit of working-age residents of social housing with spare bedrooms.

Peers pointed out that families with disabled members often need an extra bedroom for impairment-related reasons.

The Labour peer Baroness Hollis told Lord Freud, the Conservative welfare reform minister: “​A disabled child and their family are being asked to eat less or heat less in order to bridge the gap between their housing benefit and the home in which they live.”​

She added: “​Families with a disabled child will lose £​14 a week, while most of us enjoy a tax-free winter fuel allowance or find for the second year running that our council tax has been frozen.”​

Lord Freud said the amendment –​ which would only apply to those with a single extra bedroom and no suitable alternative accommodation –​ would cost about £​100 million a year by 2013-14.

Although the government lost a vote on the amendment by 236 votes to 226, the Department for Work and Pensions (DWP) later pledged that the coalition would seek to overturn it when the bill returned to the Commons.

Among other changes to the bill, there was a slight concession from the government over its unpopular proposals to impose a time-limit of one year for those in the work-related activity group who claim the contributory form of employment and support allowance (ESA).

Lord McKenzie, Labour’​s work and pensions spokesman, said the time-limit was “​one of the most indefensible provisions in the bill”​, as 100,000 disabled people would see their ESA “​disappear literally overnight”​, losing up to £​90 a week.

Although Lord Freud refused to back the two-year limit voted through by peers last month but then overturned by coalition MPs, he did accept a Labour amendment that gives any work and pensions secretary the power to increase the time-limit in the future.

And in another concession to campaigners –​ following an amendment proposed by Lord Patel, a crossbencher –​ Lord Freud said that new proposals would mean fewer patients with cancer would be affected by the ESA time-limit.

Lord Freud said the DWP had been working with the charity Macmillan Cancer Support to improve how people being treated for cancer were assessed for eligibility for ESA.

He said most cancer patients would be placed in the support group –​ for those who do not have to take part in any work-related activity –​ for the first six months while they underwent treatment, and many were likely to have a further period in the support group while they “​recover from the residual effects of treatment”​.

He said: “​It could easily be up to a year therefore for many people with cancer before the clock starts running in relation to time-limiting​.”​

The government made a third minor concession by agreeing to monitor another of the bill’​s most controversial proposals.

Peers had previously voted to overturn government plans that would prevent disabled young people with the highest support needs claiming contributory ESA.

They were prevented from re-introducing that amendment, but did secure a promise from Lord Freud that the government would monitor the impact of the changes.

The Labour peer Baroness Lister welcomed the pledge, but said it was with “​a heavy heart that I feel that we in this house and the other place have let down young disabled people who look to parliament to preserve their independent income”​.

In a fourth concession, Lord Freud promised the government would review the support provided to disabled children through the new universal credit by the end of 2015.

Peers had opposed proposals in the bill that will see benefits cut for young disabled people with lower support needs, with most families with a disabled child losing £​?27 per week.

The crossbench peer Baroness Meacher, who had proposed a new amendment that would have ensured more generous support for those children with lower needs, said the government’​s proposals were “​deeply, deeply unfair”​ and would leave many families “​cruelly treated”​ and “​severely damaged”​.

But she added: “​Disabled people and the disabled organisations who will be involved in the review will be on the case. Therefore, I feel reasonably confident that we will get there.”​

A DWP spokeswoman insisted that the four disability-related changes to the bill agreed by Lord Freud were not “​concessi​ons”​ but “​tweaks”​ and “​commitme​nts”​.

News provided by John Pring at www.disabilitynewsservice.com