The bill, dubbed “Philomena’s law” in honour of mother and baby home survivor Philomena Lee, will exclude any such payments from calculations of a person’s eligibility for means-tested benefits or financial support for social care.

Liam Conlon, the Labour MP for Beckenham and Penge, yesterday secured leave from the House of Commons for the introduction of the bill, which will now be subject to a further debate on Friday 28 March.

“Just as we did for the Windrush families, we must now change the law to ensure that compensation payments for victims and survivors are ringfenced,” Mr Conlon told MPs.

“This bill, Philomena’s law, named after the inspirational and courageous Philomena Lee, will achieve that.

“I am proud to bring it to the House today, and I hope in the months ahead we will see a change in the law so that we can deliver justice for survivors and show them the kindness and respect they have so often been denied in life.”

Just five per cent of eligible survivors in Britain have applied for a compensation payment through the Irish scheme, according to Mr Conlon.

He believes up to 13,000 survivors living in Britain risk losing their benefits under current rules if they accept the compensation.