Labour and the SNP reached a rare agreement yesterday that will effectively wipe out the so-called bedroom tax north of the border.
Finance Secretary John Swinney confirmed an extra £12million had been found to boost to £50million a fund set up to offset the impact on tenants.
The Scottish Government backed a Labour amendment to allocate extra resources to mitigate the impact of the UK Government welfare reform policy.
The deal was a late change to the Scottish Government’s Budget Bill for 2014-15, which was passed by 108 votes to 15.
The Department for Works and Pensions (DWP) set a cap of £22.85million for discretionary housing payments (DHP), which can be used to support tenants in danger of falling into arrears or debt.
The total support that can be provided directly to councils is £38million.
Mr Swinney said he was still waiting to hear from the DWP if it would lift the cap on DHP spending, but “other avenues” would be pursued if not.
He added: “I give parliament the assurance today that if the DWP says no, the Scottish Government will put in place a scheme to make this additional £12million available to social landlords so that we need not see any evictions in Scotland this year as a result solely of the bedroom tax.”
The alternative proposals put forward by Labour argued that Edinburgh could act without DWP approval.
Labour finance spokesman Iain Gray said: “By passing this Budget, as amended by Labour, we’ve shown that working together across the parliament floor to support the people of Scotland is possible and I am delighted that, with full funding now allocated, vulnerable tenants need not be subjected to the iniquitous bedroom tax.”
Graeme Brown, director of housing charity Shelter Scotland, welcomed the deal. He said: “Ultimately, the only way to banish the bedroom tax for good is to scrap the policy.
“Until that is possible, these moves to help those affected should be seen not only as a victory for commonsense but also for social justice.”
The extra £12million will include a £10million budgetary reduction – decided by the Office for Budget Responsibility – in the Scottish Government’s contribution to Network Rail and £3million from the chancellor’s autumn Budget settlement.