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The government has headed off a House of Lords defeat over plans to replace the Disability Living Allowance.

Ministers want to amend the system to make sure claimants undergo more testing, but opponents say this will mean 500,000 people will lose benefits.

A proposal to delay the scheme by carrying out an extended pilot project before it is implemented across the country was beaten by 16 votes.

The government suffered three Lords defeats on the issue last week.

Introduced in 1992 to help disabled people cope with the extra costs they face in their daily lives, Disability Living Allowance (DLA) is paid to two million people of working age.

The replacement Personal Independence Payments (PIPs) would see claimants taking up-front disability tests and then undergoing regular assessments.

The government wants to pass its Welfare Reform Bill, which includes the proposal, by the end of the parliamentary session in May.

It says it has to reduce spending on benefits, helping to cut the deficit while also increasing incentives to work and targeting support for the vulnerable more effectively.

During the Lords debate, cross-bencher Baroness Grey-Thompson, an 11-time Paralympic gold medal-winner, proposed an amendment to the bill, delaying the introduction of PIPs until further testing was carried out.

She said: "There needs to be careful scrutiny of who will be affected by these changes. For me there's a real concern about whether it could lead to a deterioration of people's health."

But work and pensions minister Lord Freud said such a delay would cost £1.4bn.

He added that the government recognised the benefit of moving away from the "big bang approach" to implementation, which would see both new claims and assessments beginning in April next year.

The number of new claims for PIP would be limited to a "few thousand per month" for the first few months of implementation, allowing "us to fully trial all the processes in a truly live environment".

The government won the Lords vote by 229 to 213.

A Department for Work and Pensions spokeswoman said: "We welcome the outcome of tonight's vote.

"DLA is in need of urgent reform so that it can give people the support they need. Under PIP a greater proportion of people will be eligible for the higher rate of help than is the case under DLA.

"People understand that the welfare state needs to change and the introduction of PIP is an essential part of this process."

An earlier Lady Grey-Thompson amendment to the Welfare Reform Bill, in which she argued reports from doctors should be a mandatory part of the PIP assessment process, was withdrawn without a vote.