The court ruled on seven cases, each of which had challenged housing benefit regulations underpinning the bedroom tax on the basis that they discriminated against the claimants’ right to family life. The claimants also contended that the regulations were in breach of public sector equality laws.

Six of the claimants (Rourke, Drage, JD, Daly, Carmichael and the Rutherford family) either had a disability themselves or lived with family members who had a disability. They claimed they needed an “extra” bedroom to enable them to cope with the health and medical consequences of the disability, and that the bedroom tax therefore unfairly discriminated against them. The seventh claimant was a single parent (“A”) who as a consequence of being assaulted and raped had had a bedroom in her home specially converted into a secure “safe room”. She claimed that the bedroom tax – which financially penalised the safe room – discriminated against women like her who live in “sanctuary scheme” homes

The judges agreed that there were unreasonable differences in the way housing benefit regulations treated adults and children. It was unfair that Jacqueline Carmichael, whose medical condition required her to sleep in a different bed to her husband, was hit by the bedroom tax while households where children needed separate rooms for reasons of disability were not. Likewise, while adults who needed an extra room for an overnight carer were exempt from the bedroom tax, children – such as Paul and Susan Rutherford’s grandson Warren, who has a rare genetic disorder and is unable to walk, talk or feed himself – were not. These anomalies, the judges ruled, were “manifestly without reason”.

As a result of their victory, the Carmichael and the Rutherford households are now exempt from the bedroom tax. The Department for Work and Pensions (DWP) says it will “take steps to ensure we comply with the judgment in due course”. This means housing benefit regulations will be changed to ensure households in similar positions are also exempted. It is not known precisely how many households will be exempt, but estimates put it in the low thousands. Households who do not get exemption will have to continue apply for discretionary help to pay their rent. These locally administered funds will be increasingly stretched as a result of the extended benefit cap

One of the Coalition’s most unpopular and punitive policies is finally on track for abolition, after Labour and the Liberal Democrats united to vote against the bedroom tax.

Mr George later admitted that he had not expected the Tories to be so heavily defeated in what he imagined would be a close vote. “It was such a stonking victory that if that coalition can hold together in the coming months we should get this Bill through,” he said.

Shadow works and pensions minister, Chris Bryant added jubilantly: “This is the beginning of the end of the bedroom tax. Whether we will manage to get it all the way through by the general election, I don’t know – but we’ll try our damnedest, and we’ll certainly abolish it afterwards.”

More than 522,000 housing benefit claimants were subject to the bedroom tax in August and had their housing benefit reduced by an average of £14.50 a week, official figures show.

The Department for Work and Pensions (DWP) said the figures were the first official returns on the impact of the controversial tax, or bedroom subsidy withdrawal.

They show more than 429,000 people were penalised for having one bedroom too many, losing an average of £12.66 a week; more than 92,000 were penalised for having two excess bedrooms, and were losing an average of £23.43 a week.

The government said there had been a steady fall in the number of households affected, with 24,000 fewer claimants affected than in May.

Although some of that may be attributed to tenants downsizing, it may also be because of more people on housing benefit finding work or seeing their wages increase.

The financial savings generated by the “bedroom tax” may have been significantly exaggerated by the Government, according to research which shows the controversial policy is likely to save £160m less in its first year than the projected £480m.

Researchers at the University of York took figures gathered since April from four of the country’s largest housing associations and applied them to a model used by the Department for Work and Pensions (DWP) to estimate savings. Riverside, Wigan and Leigh Housing, Affinity Sutton and Gentoo commissioned the team to apply their figures based on actual experience and see how they matched the department’s predictions.

One of the stated aims of the policy was to reduce housing benefit costs, but the research suggests that these were exaggerated and the DWP’s model for calculating savings “flawed”. The Government underestimated the proportion of tenants under-occupying by one bedroom who would downsize, and of those, who would end up in the more expensive private sector.

The ‘bedroom tax’ will lead to the break-up of rural communities who are bearing the brunt of benefit cuts, a leading rural network has warned.

Action with Communities in Rural England (ACRE) says the Government’s under-occupation charge for social housing tenants will force people to leave the villages where they grew up.

The charity says a dearth of one and two-bedroom homes in the countryside means rural tenants have no choice but to move into towns and cities if they cannot make up the rent shortfall.

ACRE claims the Government failed to ‘rural proof’ the penalty, which cuts the benefits of tenants of working age in homes deemed to have spare rooms.

It is backing the call by the Commons Committee for Environment, Food and Rural Affairs to exclude settlements of fewer than 3,000 people from the charge.

ACRE, the umbrella body for England’s 38 rural community councils, surveyed its members to assess the impact of the tax, which cuts housing benefit by an average of £14 a week.

Chief Executive Janice Banks said: “The Department of Work and Pensions forecast in its impact assessment that the policy could have a greater impact on rural areas because there are fewer appropriate size homes available locally.

“Yet it went ahead with a blanket approach which will inevitably force rural tenants out of villages where they have lived for years, taking them away from their extended families, schools and support networks. It will take key workers away from areas where they perform vital roles.

Leeds council has come up with a novel way of sidestepping the controversial bedroom tax: reclassifying more than 800 “spare” rooms in its social homes as “non-specific rooms”.

The creative wordplay means tenants in affected properties are not classed as underoccupying their homes and do not have to pay a surcharge as a result.

The government’s housing welfare reform, which came into effect in April, reduced housing benefit to council or housing association tenants, who ministers claim have more bedrooms than they need. The measure is estimated to have affected around 660,000 people, who are losing an average of £14 a week.

But in what appears to be a legitimate loophole, Leeds council is to reclassify around 837 spare bedrooms. Those who have already been subject to the bedroom tax and have lost out on housing benefit in the last two months are set to be refunded.