UK social housing
Housing association tenants are being forced into arrears by the bedroom tax Reuters

A group of disabled tenants have lost their Court of Appeal bid to have the so-called "Bedroom tax" ruled unlawful.

The five campaigners launched their appeal against the coalition policy, officially known as the spare room subsidy, following its introduction last April.

The court also rejected the appeal of two lone parents who claimed the government's cap on total benefits paid to families – dubbed the 'benefits cap' - also violated human rights and common law.

The campaigners launched their bid at the Court of appeal after the High Court ruled in July the changes were not discriminatory.

The changes meant those living in social housing who had what was considered a spare bedroom were asked to downsize homes or accept a reduction in housing benefits.

Critics against the tax argued it failed to accommodate the needs of disabled people who require an extra room and also caused "stress and anxiety".

In some cases, people in social housing have had their benefits cut by as much as £80 a month.

Ugo Hayter, from the law firm Leigh Day who is representing two people with disabilities, said he was "extremely disappointed" by the ruling.

He added: "The Court recognised that our clients and thousands of disabled people across the UK had a need for accommodation not provided for by the new housing benefit rules, however the Court decided that disabled tenants should not have their housing needs met on an equivalent basis to their able-bodied counterparts, just because they are disabled.

"Instead disabled tenants are being forced to rely on short-term and discretionary payments.

"We are currently considering whether an appeal to the Supreme Court is possible."

Anne McMurdie, of Public Law Solicitors, whose firm acts for three of the tenants, added: "The Government has sought to make savings by targeting the most vulnerable in our society.

"On the Government's own figures at least 440,000 disabled households will lose out under the new regulations. There is compelling and growing evidence of the terrible adverse impact on disabled tenants, having to make the dreadful choice between paying the rent and buying food or heating their homes."

The judges at the Court of Appeal rejected the claims that the subsidy and cap violated human rights or common law because of its impact on families.