A cross-party coalition of Peershave voted in favour of excluding child benefit from a proposed household benefits cap of £26,000 a year.

The amendment, tabled by Bishop of Ripon and Leeds, the Rt Rev John Packer, was backed by Liberal Democrat, Labour and crossbench peers by 252 votes to 237.

This would mean child benefit would not be counted in the calculation of the cap. In particular, it would help larger families struggling to make ends meet.

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The vote came on the day the Government admitted it had under-estimated the impact of the cap in its previous assessments, revising its estimation from 50,000 to 67,000 households.

Federation Chief Executive David Orr said: "We've long been arguing that the cap could lead to a rise in rent arrears, homelessness and child poverty. And the Government's admission that the overall benefit cap will hit many more households than originally thought underlines our deep concerns.

"The cap will simply make it more difficult for many families to find and keep a roof over their heads. It is a crude measure which will impact disproportionately on households with higher than average housing costs and those with children."

(CD/GK)