Prime Minister David Cameron has hailed "an historic step in the biggest welfare revolution in over 60 years" after the Government's controversial reforms cleared Parliament.
Peers last night ended their stand-off with the House of Commons, paving the way for the Welfare Reform Bill to reach the statute book.
The legislation brings in a £26,000-a-year household benefits cap and sets up the universal credit.
Mr Cameron said: "These reforms will change lives for the better, giving people the help they need, while backing individual responsibility so that they can escape poverty, not be trapped in it.
"Past governments have talked about reform, while watching the benefits bill sky-rocket and generations languish on the dole and dependency. This Government is delivering it.
"Our new law will mark the end of the culture that said a life on benefits was an acceptable alternative to work."
He added: "Today marks an historic step in the biggest welfare revolution in over 60 years. My Government has taken bold action to make work pay, while protecting the vulnerable."
The Bill had a stormy passage through the Lords, with peers inflicting seven defeats on the Government when the legislation was first considered and a further one after MPs had overturned all the setbacks.
But last night independent crossbencher Lord Best withdrew without a vote an amendment on the final point of dispute between the Houses - the so-called bedroom tax which penalises council tenants for under-occupancy - and the Bill will now be sent for Royal Assent.
Mr Cameron said: "While we've been putting in place a sensible, modern welfare system that protects the vulnerable, our opponents have shown they are on the side of Britain's something-for-nothing culture.
"We've stood up against the abuse that left taxpayers footing the bills for people on £30,000 or even £50,000 a year in benefits.
"It's a fair principle: a family out of work on benefits shouldn't be paid more than the average family in work.
"This is a core part of the Government's task of turning around the legacy of debt, overspending and waste we inherited.
"We want money to go to people who need it, not subsidising the consequences of our broken society. By reforming welfare we will get people into fulfilling jobs - not abandon them to poverty and dependency - save billions of pounds of taxpayers' money and make sure those who really need help get it.
"That's compassionate modern government in action.
"It's also a huge tribute to the Secretary of State for Welfare, Iain Duncan Smith, who has worked tirelessly and with real moral purpose in tackling the blight of welfare dependency."
The Government suffered a series of high-profile defeats this year as the Bill made its way through the Upper House.
The most prominent came when the Bishop of Ripon and Leeds, the Rt Rev John Packer, led a move to exempt child benefit from the £26,000 cap.
Last night, shadow welfare minister Lord McKenzie of Luton told peers that the Lords had improved the Bill "in some respects".
But he added: "In too many ways it imposes unacceptable burdens on the most vulnerable. They are entitled to better from their Government."
Welfare Reform Minister Lord Freud rejected an amendment from Lord Best which would have set up a review of the bedroom tax.
But he said: "We will carry out research on this measure once it has been introduced to understand its effect. However, I do not see the need to put this on the face of the Bill."
Following his assurances, Lord Best withdrew his amendment, ending the so-called ping-pong between the Houses.