The government's plans to reform welfare were badly hit on Wednesday when it suffered three defeats in the House of Lords on proposed benefit cuts.

Plans to means-test employment and support allowance (ESA) payments for disabled people after only a year were rejected by peers.

The means test would have applied to cancer patients and stroke survivors, and was denounced by Lord Patel, a crossbencher and former president of the Royal College of Obstetricians, as an immoral attack on the sick, the vulnerable and the poor. "If we are going to rob the poor to pay the rich, then we enter into a different form of morality," Patel said.

The government was defeated by 224 votes to 186, even though Lord Freud, the welfare minister, claimed that the cost of the amendment would be £1.6bn spread over five years.

The other defeats were over plans to time-limit ESA for those undergoing cancer treatment, and to restrict access to ESA for young people with disabilities or illness.

The defeats do not augur well for the government's chances in future votes in the Lords on the bill, which includes housing benefit caps. The bill is at report stage before returning to the Commons.

Some peers warned the Lords they should not vote down the measure to restrict ESA payments to a year since the cost of doing so would be so high and MPs would be certain to reverse the result. Patel, backed by the shadow welfare minister, Lord McKenzie, proposed that the government's plan to time-limit contributory ESA to a year should be extended to two years. At that point, irrespective of how much someone has paid into the system, a means test set at an income of £16,000 would start to apply, leading to annual cuts in benefit of £94 a week.

Freud countered that the 365-day time limit was not arbitrary and was similar to limits imposed in France, Ireland and Spain, and struck a "reasonable balance between the needs of sick, disabled people claiming benefit and those who have to contribute towards the cost".

He said one year was the right balance between restricting costs and allowing people to adapt to their changed circumstances and was double the time allowed for contributory jobseekers' allowance.

With a few exceptions, the Liberal Democrats voted with the government as they generally have throughout the divisions in the Lords on the welfare bill, but their support was overwhelmed by a big turnout from Labour and crossbenchers. The Labour peerage is armed with welfare experts including Lady Lister and Lady Hollis.

Crossbenchers have also been furiously lobbied by disability campaigners arguing that they should not be made to suffer for the economic crisis.

Many Liberal Democrats have been uncomfortable voting with the government, but feel forced to do so if they are to abide by their coalition commitment to bring the deficit under control.

In a report out on Thursday, the Commons public accounts committee finds that fundamental changes to the benefits system, including the introduction of a new means-tested universal credit to replace some existing means-tested benefits, may fail without the formation of a new body.

Margaret Hodge, the chair of the committee, said that the government must learn from past experience and co-ordinate benefits more effectively.

"At present, there are nine central government departments and 152 local authorities administering 30 different means-tested benefits, yet there is no one body responsible for co-ordinating means-testing across government," she said.

"There needs to be a single body responsible for overseeing the interaction between different benefits, means-tested or not, and ensuring consistency and value for money."

A DWP spokesman said: "This report highlights exactly why we need universal credit. It has been designed across departments with the benefits and challenges raised by the PAC in mind.

"It will mean more people getting the money they are entitled to whilst reducing complexity and fraud in the system."