The House of Lords has, for a second time, rebuffed the government’s welfare reform bill proposals to slash £30 a week from the benefits of ill and disabled people who have been found unfit for work.

On Monday evening defiant peers in the Lords voted 289 and 219 to delay the cuts – which could see benefits reduced by over £1,500 a year – pending a parliamentary report on the impact on claimants.

It came after work and pensions minister Lord Freud offered concessions to try to head off a revolt and warned peers against supporting a "wrecking amendment" to the welfare reform and work bill.

However, the Commons last week overturned an earlier Lords vote rejecting ministers’ plans to cut employment and support allowance (ESA), despite concerns raised by some Conservative backbenchers.

“If we don’t get this right we will damage not just the employment prospects and wellbeing of these vulnerable claimants, but also our reputation and our trust among the electorate,” said Conservative MP Heidi Allen.

The process between the two houses, hammering out the contents of a bill, means all legislation can go back and forth – also known as “ping pong” – until an issue is resolved.

Conservative ministers are arguing that cutting the ESA entitlement from April 2017 for new claimants in the work-related activity group (Wrag) would provide and incentive for them to return to work. Peers, however, claim there is no evidence of this while campaigners insist it will push benefit claimants into further poverty.

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Elliott Dunster, head of policy at the disability charity Scope, said to the Guardian: “Disabled people are pushing to find jobs and get on at work, but they continue to face huge barriers, from employer attitudes to inaccessible workplaces.

“Reducing disabled people’s incomes won’t incentivise them to find a job. It will just make life harder.”

The Department for Work and Pensions claimed the vote which saw the Government defeated was "routine" and said ministers would respond shortly.