Defeat number seven on Welfare Bill leaves Government bruised

government plans to cut payments to families with disabled children were rejected by the House of Lords last night in a seventh defeat for Iain Duncan Smith’s welfare reforms.

In another embarrassing blow to the Welfare Reform Bill, peers voted by 246 votes to 230, majority 16, against the move, backing an amendment by independent crossbench peer Baroness Meacher to limit cuts to top-up payments made to the parents of disabled children.

The Government wants to introduce a slight increase to the weekly rate for the most disabled children, taking it to £77, while halving the lower rate to £27.

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Ministers argue the money saved will be spent on providing additional support to the most disabled adults.

But Lady Meacher said the Government’s plans would mean families with a child on the lower rate losing £1,400 a year. Her successful amendment specifies that the lower rate must be at least two-thirds of the higher rate.

She said the Government aimed for the proposals to be “revenue neutral” and told peers: “The proposition here is that Ministers revisit the relationship between the new levels of disability addition for children and allocate resources to adults when new money allows.”

She warned that there would be a “cliff edge” between the two levels of the benefit and said there were children who were “very severely disabled” who would not qualify for the higher amount.

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“One hundred thousand or so children affected by this loss of benefit are very likely to live in poverty and recent research by the Children’s Society shows that once the additional costs of disability are accounted for, four in every 10 disabled are actually living in poverty, so a loss of some income really does matter.”

The greatest defeat came over the Government’s £26,000-a-year benefits cap and plans to charge parents to access the Child Support Agency.

The Bill later cleared the Lords. It is due to return to the Commons today.

There, MPs are expected to overturn many, if not all, of the defeats, resulting in a potential stand-off with peers.