Uphill struggle to move to a smaller property

Hello there, I am new to the community.  I have a progressive lung disorder called aspergillus, Asthma, Addisons Disease, Osteoporosis, Angina and frequent lung blood clots and Esophageal ulcers.  At the age of 58 I was retired on the grounds of ill health three years ago from a job I loved.  I am really struggling at the moment, having got into debt by living on credit cards.  I receive lower rate PIP, won my appeal against the DWP for ESA (horrendeous experience) and now face an uphill struggle to move to a smaller property (I am in social housing).  Can anyone advise me?  I have found a mutual exchange to a smaller house with one less bedroom but have found that my housing association do not assist financially with downsizing and neither does my local council.  As a move will cost in the region of £1,000, I am now stuck in the difficult position of being unable to afford to move but I am penalised for having a spare bedroom.  Can anyone advise me please?  Many thanks,  Jay