Tens of thousands of people claiming housing benefit have been forced to “take action” and find work or move to a smaller home because of the so-called “bedroom tax”, Iain Duncan Smith has said.

Figures released by the Government show a 9 per cent fall in the number of housing benefit claimants facing a reduction in their housing benefit due to the removal of the spare room subsidy.

The number of social housing tenants who have had a reduction in their benefits because they were considered to be under-occupying their property fell from 547,000 in May to 498,000 in November 2013. The “under occupancy penalty” is intended to ensure that the best use is made of social housing and reduce the housing benefit bill of £20 billion a year.

The Department for Work and Pensions estimates that the change will save taxpayers £480 million a year. The average loss for a single empty bedroom will be £14 per week. Mr Duncan Smith, the Work and Pensions Secretary, said: “Removing the spare room subsidy will help to turn the tide that saw around 300,000 households living in overcrowded homes in the social rented sector and 1.7 million households on the waiting lists in England alone.”

Other figures showed benefit payments have been suspended 818,000 times to people who have failed to do enough to find work, turned down job offers or not turned up to JobCentre appointments since new rules were introduced in October 2012.