The concessions were announced in a written ministerial statement after weeks of growing political pressure over the policy. It dominated exchanges last week at prime minister’s questions in the Commons, where David Cameron defended the policy, which he called the “spare-room subsidy”, from an attack by the Labour leader, Ed Miliband.
The changes will mean that about 5,000 approved foster carers will be allowed an additional room as long as they have fostered a child or become a registered carer in the past 12 months.
Adult offspring in the armed forces who are away on operations will be counted as continuing to live at home, as long as they intend to return home.
Duncan Smith also said he had issued guidance to local authorities emphasising that discretionary payments would be available to support “other priority groups” affected, including “people whose homes have had significant disability adaptations and those with long-term medical conditions that create difficulties in sharing a bedroom”.
The bedroom tax, due to come in in April, will penalise households in social housing deemed to have more bedrooms than they require. About 670,000 households will face a 14% cut in housing benefit for the first bedroom deemed surplus to requirements and 25% for two or more bedrooms. The government estimates the average household affected will lose £14 a week.
David Orr, chief executive of the National Housing Federation, which represents housing associations, said the concessions did not go far enough, and called the U-turn an admission by ministers that the bedroom tax was “ill-thought and incompetent”.
He said: “Exempting armed forces personnel and giving foster carers some protection from the bedroom tax is not enough. The bedroom tax is still an unfair and perverse tax which will hit hundreds of thousands of other vulnerable people living in social housing around the country. They are being penalised for a weak housing policy that for years has failed to build enough affordable homes and reduce the housing benefit bill.
“The Department for Work and Pensions’ continued claim that discretionary housing payments [DHP] will protect all of the most vulnerable is simply not true. Even if DHP was divided equally only among those receiving disability living allowance, they would receive only £2.51 a week, compared to an average loss of £14 per week. It doesn’t add up.”
He added: “The government must repeal this ill-conceived policy, but at the very least right now it must exempt disabled and other vulnerable people from these cuts.”