Peers voted against plans to restrict access to employment and support allowance (ESA) for young people affected by disability or illness.
But despite the vote, which was won by 260 votes to 216, ministers have said they will reverse the amendments imposed by the Lords when the bill returns to the House of Commons.
The National Autistic Society has warned that the government must listen to the concerns raised in the Lords to ensure young disabled people are not impacted by cuts.
Mark Lever, chief executive of the charity, said: "We are concerned that the plan to means-test young people with autism and other disabilities for ESA as part of the government’s cuts programme could result in thousands of vulnerable young people having no income of their own.
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