Disabled families have seen their legal challenge against the so-called bedroom tax thrown out of court.
Lawyers representing 10 families brought a judicial review against the benefit changes rolled out more than three months ago by government.
They argued that cutting the amount they received in benefits for having extra rooms in their homes breached human rights.
The judicial review had threatened to throw a keystone government policy into chaos. But at the High Court a judge sided with David Cameron's administration, ruling the changes do not breach human rights or equality laws.
The Department of Work and Pensions (DWP) welcomed the decision. Work secretary Iain Duncan Smith has repeatedly claimed the changes are "fair" and are backed by public opinion.
In contrast campaigners labelled the ruling, which followed a three day-long hearing in May, as a blow.
Steven Sumpter, who is disabled, told IBTimes UK the bedroom tax will hit vulnerable people. He is fighting the DWP over changes to the personal independence payment (PIP) for disabled people.
Sumpter said: "The bedroom tax discriminates against disabled people. It's a big concern for me that the judge has not found that the extra costs of the bedroom tax will be a big problem.
"This is bad news for disabled people who have two-bedroom flats for equipment or a carer, who are now they are being told they have to pay for these rooms, when they simply do not have the money."
Supporters of the benefit reform claim it is necessary to prevent under-occupancy in council homes and to make best use of limited housing stock.
A DWP spokesman said: "We are pleased to learn that the court has found in our favour and agreed that we have fulfilled our equality duties to disabled people.
"Reform of housing benefit in the social sector is essential, so the taxpayer does not pay for people's extra bedrooms.
"But we have ensured extra discretionary housing support is in place to help those who need it and today we have announced a further £35m of funding to councils to aid residents."