THE UK Government has suffered an embarrassing defeat at the Court of Appeal over rules covering the amount of housing benefit paid to disabled people.

The court ruled unanimously that regulations on under-occupancy are discriminatory against disabled people as they do not allow for an additional room where a disabled person has an overnight carer, or if two children are unable to share a room as one or both has a disability.

The rulings are a blow for the Government which forced through the changes, overturning amendments in the House of Lords which would have addressed the issues.

However, the outcome was welcomed by disability charity Capability Scotland, which said the Government had been willing to ride roughshod over the rights of disabled people.

Alison Garnham, chief executive of the Child Poverty Action Group, added: "This is a tremendous victory for the rights of disabled people and their children.

"Disabled people and their families and carers are being assaulted by a series of unjust and arbitrary cuts.

"This ruling goes some way to mitigating the cuts, but children and adults are still being made the unfair target of the Coalition's austerity agenda."

The cases were brought by Ian Burnip, Lucy Trengrove and Richard Gorry against Iain Duncan Smith, the Secretary of State for Work and Pensions.

Mr Burnip and Ms Trengrove were denied payment to cover a room for a carer. As a result, their benefit did not cover the full rent.

Ms Trengrove died while waiting for her case to be resolved and the appeal was pursued on her behalf by her mother.

Mr Gorry was penalised as housing benefit would no longer pay for separate rooms for his two daughters, although their different disabilities meant they were unable to share a room.

The Government has amended the rules to allow councils to pay a higher allowance if disabled people need a resident carer, but has not addressed the second situation.

In addition, the rules currently only cover private rents, but from April next year under the Welfare Reform Act, the same principles will also affect social housing.

Capability Scotland's director of external affairs, Richard Hamer, said these and other cases, such as when a disabled person needs extra space for equipment for dialysis, needed to be resolved.

He criticised Coalition ministers who he said had ignored their own disability impact assessment when they pressed ahead with housing benefit reforms.

He added: "The Government has admitted that more than two-thirds of the households affected by housing benefit changes being implemented from April 2013 will include a disabled person.

"The changes are a blatant attempt to save money from those who they perceive to be least able to fight back.

"Fortunately, this case gives us a clear signal the courts will not stand aside and allow the Government to ride roughshod over disabled people's legal rights."

Stirling MP Anne McGuire, Labour's shadow spokesman for disabled people, said: "In pursuit of their flawed welfare reform plans, Government ministers ignored their own impact assessment.

"I am pleased the ruling confirms the Government has got to recognise disabled people have rights under UK law."

A spokeswoman for the Department for Work and Pensions said: "The Government will carefully consider its response to the Court of Appeal judgment handed down today."