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Claims that thousands of young people were being forced into poverty by "arbitrary" social security rules were rejected at the high court.

In what was regarded as a test case, lawyers argued that it was a violation of young people's human rights for 18 to 24-year-olds to receive significantly less in job seeker’s allowance, simply on the basis of their age.

Under current rules, job seekers aged 25 or over receive an allowance of £52.20 per week compared with £41.25 per week for 18 to 24-year-olds.

Mr Manjit Gill QC argued that the weekly £10.85 shortfall represented a "huge loss" and was the difference between achieving the subsistence level and slipping below the poverty line for his client Joanne Reynolds, who lost her job in October 1999 when she was 24.

But Mr Justice Wilson rejected arguments that the rule amounted to unlawful discrimination or a violation of Reynolds’ right to respect for home and private life.

He said the government’s justification for the age demarcation was not "manifestly without reasonable foundation".

Jason Coppel, counsel for the department for work and pensions, told the court there were powerful reasons for maintaining lower payments to benefit claimants under the age of 25, including the fact that younger people generally earned less that their older peers.

Coppel added: "The secretary of state takes the view that it is undesirable, for broader policy reasons, to discourage young benefit claimants from seeking to live independently.

"It is ultimately a matter for parliament and the elected government of the day to determine where the balance of social policy lies."

Reynolds, a young mother from the West Midlands, was refused the right to take her case to the court of appeal – although she still retains the option of a direct application for an appeal hearing.