A disabled rights campaigner fears she will have to give up her home and her two dogs after losing a case in the High Court in London.
Anne Pridmore was one of five severely disabled people from across England who challenged the Coalition Government's decision to scrap the independent living fund (ILF).
The Government which closed the fund to new claimants in 2010 said it was too expensive and aims to close it altogether in 2015.
Anne, 73, who has cerebral palsy, gets about half of her benefits directly from the Department of Work and Pensions (DWP) through the ILF.
Anne said: "I am deeply disappointed by the court ruling and we shall be consulting our lawyers to see if we can appeal."
She fears her payments will be cut once the job of allocating funds, which will not be ring fenced, is handed over to local councils.
She and the other four challengers had argued the Government had breached the Equality Act by failing to assess the impact of the closure on disabled people.
The case, which was heard in March, followed a series of judicial reviews of other decisions by Government departments and public bodies to cut services and spending due to the coalition's deficit reduction plan.
But on Wednesday a High Court in London ruled the Government had not breached equality rules over the move.
Anne pays for around-the-clock care and says without the full funding she will not be able to afford to live in her home of the past 47 years.
She said: "The funding will not be ring fenced and it will mean I will have to go into residential care. It will mean the six care workers I employ will most likely be made redundant."
She added: "The closing of the fund is an attack on the most vulnerable in society. I did not think I would face losing my home at my time of life. If I go into residential care, I will have to give up my two dogs too."
Anne, who has been campaigning for disabled people's rights for 27 years said about 19,000 would be affected by the scrapping of the fund.
A spokesperson for the DWP said: "The ILF was closed to new users in 2010 and we are now devolving funding to local authorities to ensure the remaining users have their needs met in a single cohesive system.
"Nearly 1.6 million disabled people across the UK already receive support through local authority and devolved administrations social care arrangements.
"The judge agreed the consultation had been carried out correctly and has refused permission for the claimants to appeal. If the Court of Appeal gives permission to appeal, the DWP will defend such an appeal."
