MPs have voted to overturn Lords' call for changes to the controversial plans for a so-called "bedroom tax", which is part of the Welfare Reform Bill.
The bill is "ping ponging" between the two Houses of Parliament, after peers inflicted a series of defeats on the plans for England, Scotland and Wales.
Most of the defeats were overturned but one area of disagreement remains.
Peers still want to limit cuts to payments to social housing tenants in homes deemed bigger than their needs.
The government wants its new Universal Credit - which would be introduced by the bill from 2013 - to include an "under-occupancy" penalty for council and housing association tenants, who are considered to have more rooms than they need. Currently they are allowed to have one spare bedroom.
Those judged to have one extra bedroom would lose 14% of housing benefit a week, those with two or more extra rooms would lose 25%, if they do not move to a smaller property. Critics call it the "bedroom tax".
Last week the government was narrowly defeated on the issue by just 10 votes - including six Lib Dem peers.
Peers backed crossbencher Lord Best's amendment, which would exempt disabled tenants, war widows and foster carers from the penalty, unless they refused to take up an offer of a suitable alternative home.
The government says that would cost an extra £100m in 2013-14, at a time when they are seeking to reduce the deficit.
But during last week's debate, Lord Best warned that poor families could be forced to turn to loan sharks to make up the shortfall in their rent, when the changes come into force.
''While older tenants may have put aside a bit, few will be able to cope when faced with a new tax of £728 every year on top of the rises in their heating bills and other costs,'' he said.
But on Tuesday MPs overturned the Lords defeat by 316 votes to 263, a government majority of 53 votes. The Welfare Reform Bill will now be sent back to the House of Lords.
A Department for Work and Pensions spokesman said the Commons had "made its position clear on amendments which would result in additional spending".
''The majority of the public agree with the government's welfare reforms and we look forward to delivering on these radical proposals that will make our welfare system better and fairer.''
MPs have already overturned a series of other defeats inflicted by peers on plans for an overall household benefits cap, charges for the Child Support Agency, means testing contributory employment and support allowance and changes to Child Tax Credit payments for disabled children.
The Commons gave "financial privilege" as a reason for rejecting the Lords amendments - arguing they were related to tax and spending decisions that the Lords, by convention does not oppose.
Some senior peers fiercely criticised the use of the rule, saying it restricted their ability to scrutinise legislation.