The relationship between the Tories and Lib Dem's is under increasing pressure after Nick Clegg changed tack on 'bedroom tax'.
After a committee of MPs said the bedroom tax unfairly affects disabled people, Tim Farron says his party will push for change.
The mother of a disabled child described how she struggles to make ends meet after having her housing benefit cut by 14%.
The chair of the Work and Pensions Select Committee has said those being hit by the withdrawal of the spare room subsidy are often not those the policy was intended for.
Dame Anne Begg said: "Many of the people being hit by the so-called 'bedroom tax' are in vulnerable groups, very often people with disabilities who can't move house."
The Government has reformed the housing cost support system with the aim of reducing benefit expenditure and incentivising people to enter work.
But vulnerable groups who were not the intended targets of the reforms and are not able to respond by moving house or finding a job are suffering as a result.
– Dame Anne Begg, House of Commons Work and Pensions Committee chair
The Government's reforms are causing severe financial hardship and distress to vulnerable groups, including disabled people.
Discretionary housing payments (DHPs), which local authorities can award to people facing hardship in paying their rent, are not a solution for many claimants.
Our reforms are necessary to restore fairness to the system and make a better use of social housing. Unreformed, the Housing Benefit bill would have grown to £26 billion in 2013/14.We have given councils £345 million since reforms came in last year to support vulnerable groups, especially disabled people.
– Department for Work and Pensions spokesma
The removal of the spare room subsidy means we still pay the majority of most claimants' rent. But we are saving the taxpayer £1 million a day which was being paid for extra bedrooms and are freeing up bigger homes for people forced to live in cramped, overcrowded accommodation.
The work and pensions select committee voted down a proposal from Labour MP Sheila Gilmore to call for the policy, officially known as the removal of the spare room subsidy, to be scrapped but it did urge ministers to exempt:
- anyone whose home has been adapted to help them with their disability
- any household containing a claimant receiving disability benefits at the higher level
- carers living with disabled people should be exempt from the benefits cap
It said that it was "particularly unjust" for homeless people to be subjected to the benefits cap, as they have no choice over the temporary accommodation in which they are placed, which may force them over the limit. The committee called for them to be exempted from the cap.
Disabled people are suffering "severe financial hardship and distress" as a result of the 'bedroom tax', a cross-party committee of MPs has said.
The decision to reduce housing benefit payments from social tenants deemed to have a larger home than they need has hit vulnerable people who were not the intended targets of the reform and have little hope of moving to a smaller property, the House of Commons Work and Pensions Committee found.
The Labour party is claiming more than 20,000 councils tenants have been wrongly paying the so-called "bedroom tax" because of a Government error.
Shadow work and pensions secretary Rachel Reeves says that 194 councils out of 346 who replied to a Freedom of Information request showed that 21,500 people have overpaid.
The coalition says it is working on fixing the loophole which is causing the errors.
Work and Pensions Secretary Iain Duncan Smith challenges Labour's figures, claiming the amount of tenants who have overpaid was likely to be around 5,000.
Lord Dyson, Master of the Rolls, said the legal challenges were to two "of the Government's most controversial measures" relating to state benefits.
The court could only intervene if the measures "were manifestly without reasonable foundation", the judge said.
He ruled that the test was not satisfied and both challenges must fail.
Representatives for two of the people with disabilities who lost their bid said they were "extremely disappointed" and "baffled" by the court's findings.
"We are currently considering whether an appeal to the Supreme Court is possible" said Ugo Hayter, from law firm Leigh Day.
Five disabled tenants have lost their bid at the Court of Appeal to have the UK Government's so-called "bedroom tax" declared unlawful.
The changes were introduced last April. People living in social housing who were deemed to have a spare bedroom were asked to downsize or accept a reduction in housing benefit.
Two lone parents have lost their separate Court of Appeal challenge to the legality of the "benefit cap".
Judges rejected claims that the policy violates human rights laws and the common law because of its impact on vulnerable families.
In test cases of national importance, today's ruling at the Court of Appeal will decide whether "bedroom tax" regulations, introduced last April, are an "excessive and unfair burden" on people with disabilities, or a lawful and "integral aspect" of the Government's deficit reduction programme.
Backed by the Equality and Human Rights Commission, lawyers for five tenants are arguing that the regulations cannot be allowed to stand.
The Department for Work and Pensions rejects the "bedroom tax" tag and says the reality is a "spare room subsidy" has been removed from social sector tenants.
The change in regulations is expected to produce savings of £500 million a year, but opponents say they have had a "devastating" impact on many people and fail to reflect the actual needs of disabled people for extra space.