Rose Graham of Liverpool challenged the Department of Social Security when it reduced her benefit when she reached the age of 60. She claimed the Government was discriminating against women because men were able to receive the higher invalidity benefit until they reach their state pension age of 65.
The court ruled the Government was not in breach of European law requiring equal treatment of men and women in social security payments.
The Equal Opportunities Commission, which backed Mrs Graham, said it was very disappointed by the decision, which could affect thousands of women.
Diana Brittan, deputy chairwoman, said: "Today's decision is bad news for many women who, unlike men, will not be able to receive full invalidity benefit for an extra five years.
"Discrimination at any age is unfair. Discrimination in older age when incomes are often lower, is a greater injustice.
"The state pension ages should not be used to create more sex discrimination in the social security system."
Mrs Graham's entitlement to invalidity benefit dropped by pounds 35 a week when she reached 60. A man of the same age and state of health would have been allowed the increased benefit until the age of 65.
Mrs Graham won her case before a social security appeal tribunal and the social security commissioners before it was referred to the European court. Mrs Graham, 65, said: "I am disappointed for the other women affected, but the fight will continue for all women who have been discriminated against."
Phil Shiner, her solicitor, said at least 41,000 similar cases will be affected by the ruling. He accused the Government of "hiding" behind court cases as a way of not complying with a European directive on payment of social security benefits.
"The Government insists on treating each benefit or form of discrimination as a single issue and fighting it through the courts. This should stop and there should be a fundamental review of the social security system, which should be equalised for men and women over pensionable age."
The Department of Social Security said that it welcomed the judgment and was studying the terms of the ruling.
Liz Lynne, Liberal Democrat social security spokeswoman, said the ruling was "very bad news" for all women.
"Invalidity benefit in particular was a contributory benefit and women have paid the same amount in as men. They should get the same amount out.
"In the same way as we have called for equalisation of state pensions, we have also called for men and women to be treated equally with regard to other benefits."Reuse content