The Government's plan for a real-terms cut in working-age benefits has cleared its first Commons hurdle after heated exchanges between coalition and Labour MPs.
MPs voted by 324 to 268, majority 56, to give the legislation a second reading, but former Liberal Democrat minister Sarah Teather rebelled and warned attacks on the poor could lead to the "fragmentation" of society.
Labour branded the plan a "strivers' tax" as 68% of households caught by the below inflation rise in benefits were in work.
But Work and Pensions Secretary Iain Duncan Smith accused Labour of tying working families into the benefits system and "buying votes" by increasing handouts.
He said: "They think that helping people is about trapping more and more people in benefits. What is really interesting is that under the tax credit system, nine out of ten families with children were eligible for tax credits.
"This went in some cases up to over £70,000 in earnings. What a ridiculous nonsense they have created."
The Welfare Benefits Up-rating Bill limits rises in most working-age benefits to 1% in 2014/15 and 2015/2016 instead of linking them to inflation. Similar measures for 2013/14 will be introduced separately.
The plan, announced by George Osborne in his Autumn Statement last year, is aimed at slashing £5 billion from the welfare bill over the next five years.
A Labour bid to block the Bill and insist on a "compulsory jobs guarantee" was defeated by 328 votes to 262, majority 66.
Mr Duncan Smith said that since the beginning of the recession incomes for those in work have risen by about 10% but for those on benefits they have risen by about 20%.