The Government has comfortably survived the first of a series of crucial challenges to its controversial welfare reforms in the Lords.
Ministers saw off a Labour-led move to exempt families threatened by homelessness from a benefits cap by 250 votes to 222, majority 28.
The vote came after work and pensions minister Lord Freud condemned the bid as a "wrecking amendment" which would render the policy "unworkable".
Opposition spokesman Lord McKenzie of Luton said his party backed the £26,000-a-year benefit cap but it had to be "based on fairness".
In report stage debate on the Welfare Reform Bill, Lord McKenzie warned that the cap "dramatically increased the prospects" of people becoming homeless and could force hard-pressed councils to pick up an even more expensive bill to re-house them.
He said the emotional and physical impact of uprooting families, and children in particular, from their local communities would be "traumatic".
But Lord Freud defended the cap, insisting households should not be able to receive more in benefits than the average family earned from work.
"People on benefits should face the same choices as working families, including where they can afford to live," he said.
After suffering three defeats on the legislation recently, ministers are facing a concerted attack from Labour peers, Church of England bishops and some Liberal Democrat rebels who want concessions.
Former Liberal Democrat leader Lord Ashdown on Sunday warned the plans to cap benefits were "completely unacceptable" in their current form.
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