An estimated 4,000 families with around 14,000 children are now able to apply for extra financial support through their local council’s Discretionary Housing Payments scheme.

Social justice secretary Shona Robison said: “We are increasing funding to help bridge the gap between what people need in benefits from the UK Government and what they actually receive. Eligible households could be £2,500 better off on average per year as a result.

“We will spend up to £84 million in 2023-24 on Discretionary Housing Payments to mitigate not only the UK Government’s bedroom tax and the on-going freeze to Local Housing Allowance rates, but now also the benefit cap which is pushing families into hardship.

“Our child poverty targets are ambitious and that is why we are choosing to invest significantly more in social security than the funding we receive from Westminster and helping to mitigate the damaging impact of UK Government welfare cuts.”

John Dickie, chair of the Child Poverty Action Group, said: “Mitigating the UK benefit cap is absolutely the right thing to do. Support for struggling families shouldn’t have an arbitrary limit that pushes children into deeper poverty.

“It’s now vital that everyone affected by the benefit cap applies to their local authority for a Discretionary Housing Payment to replace as far as possible the cash support removed by the cap. The Scottish Government has done the right thing, now the UK Government must act to scrap the cap altogether.”

Laura Millar, strategic manager at charity Fife Gingerbread, which helps lone parents and families in need, said: “Last year Fife Gingerbread supported the ‘Scrap the Cap’ campaign calling on Westminster to end the benefit cap and the financial hardship this causes. Therefore, the Scottish Government’s commitment to empower local authorities to mitigate the impacts of the benefit cap using Discretionary Housing Payments is a positive step.

“Although the number of households affected across Scotland may be relatively small this is an important measure. The greatest risk is that households may be unaware of their entitlement, and every year millions of pounds of benefits go unclaimed. Therefore, we must all raise awareness of this announcement to ensure those most in need of support receive it.”