Single mothers who launched a challenge against cutbacks in the benefits system have lost their case.
The Supreme Court ruled by a 3-2 majority verdict that the Benefit Cap (Housing Benefit) Regulations 2012 are not unlawful.
Two women who were both victims of domestic violence and forced into temporary accommodation in London, brought the legal challenge.
Their lawyers argued that the cuts violated human rights laws and disproportionately affect women, especially those seeking to escape violent partners.
Work and Pensions Secretary Iain Duncan Smith said he is "delighted" by the ruling.
The benefit cap limits the amount of benefits a household can receive to £500 a week for couples and £350 a week for households of a single adult.
Alison Garnham, Chief Executive of the Child Poverty Action Group, said: "The women and children involved in this case were escaping horrific abuse. As three of the judges have said: 'It cannot be in the best interests of the children affected by the cap to deprive them of the means of having adequate food, clothing, warmth and housing'.
"We hope the Government will listen to the Court and comply with international law on the protection of children."