Government suffers Lords defeats over welfare cuts
The government has lost three votes in the House of Lords over its plans to cut the welfare bill.
Peers voted by 260 to 216 to protect up to 15,000 young disabled people from cuts to employment support allowance.
They voted 234 to 186 for a two-year limit on claims, rather than the proposed one year, and by 222 to 166 to exempt cancer sufferers from a limit.
Critics said the plan had meant disabled children who could never work would never be entitled to the benefit.
The employment support allowance (ESA) has replaced incapacity benefit.
As part of their drive to cut spending on welfare, the government wants to remove the so-called "youth provision" that allows some young people to receive contributory employment and support allowance (ESA) even though - due to disability or illness - they have not been able to work and build up National Insurance.
Opponents of the coalition's plans said they would mean disabled children who could never work would never be entitled to the benefit.
Welfare Minister Lord Freud said it was unfair for a young person to continue to get a contributory benefit without having "paid in" - even if they were to inherit a lot of money.
He estimated that 90% of those affected by the change would still get the income-related part of ESA.
But peers, led by crossbencher Baroness Meacher, argued it would have a "devastating" effect on young people with disabilities or long-term illnesses, depriving them of £25 a week.
She told the Lords: "These young people have conditions so severe that they are entitled to be supported.
"It really puts them in a completely different category from other people who grow up, are able to earn, able to build up capital, able to gain contributions.
"The government said they will protect the most vulnerable. The prime minister himself made a very personal commitment to help these people.
"Is there anyone more vulnerable than a severely disabled young person who has never and will never have the chance of earning a living?"
In the second defeat on Wednesday evening, peers agreed a move to replace the one-year cap with the ability for the government to legislate for a limit of not less than two years.
"I am sympathetic to cutting the deficit, but I am highly sympathetic to sick and vulnerable people not being subjected to something that will make their lives even more miserable," said the crossbencher and eminent doctor Lord Patel, who introduced the amendment.
His second amendment removed the time limit on contributory ESA payments for people receiving treatment for cancer.
The defeats mean the measures will be removed for the time being from the government's flagship welfare reform bill pending a decision by ministers on how to respond.
The BBC's deputy political editor James Landale said that if the proposals were dropped entirely, the government would lose an estimated £2bn in savings.
Labour urged the government to "do the decent thing" and not to try and re-introduce the measures.
"The government has been defeated because quite simply they tried to cross the basic line of British decency," shadow work and pensions secretary Liam Byrne said.
"For months Labour has been determined to stop this cruel attack on cancer patients in its tracks. And today the House of Lords agreed."
The government also suffered a defeat last month over elements of their plans to overhaul housing benefit.
Despite these setbacks, ministers say they are determined to pass legislation that will increase incentives for people on benefits to work while protecting the most vulnerable and making welfare expenditure more sustainable.
"Our plans are about returning the welfare state to its original purpose of supporting those with the most need," a spokesman for the Department for Work and Pensions said.
"This means ensuring that taxpayer's money is spent on those who are too sick or disabled to work and those with the least money."