Their lawyers had asked the court to declare "unlawful" the consultation process that led to the proposed axing of the £320m fund.
The five are among 19,000 people who receive money from the ILF, which the government plans to scrap in 2015.
The scheme aids independent living and the average pay-out is £300 a week.
The government has said that councils, which administer most social care, will take over funding this help.
On Wednesday, a judge dismissed the application, saying the consultation process had been lawful.
The claimants feared that disabled people could be forced out of independent living arrangements and into residential care, or trapped at home by the fund's closure.
At a hearing in March, they had argued that there have not been clear reasons given for closing the fund; the consultation featured inadequate information on the differences between the fund and local authority assessment and provision; and there had not been proper assessment of the impact of the change on disabled people's ability to live and work independently.
The Department for Work and Pensions has previously said that help for disabled people has been fundamentally changed by personal budgets, intended to give recipients more control, and that it makes sense to have a single system administered by local authorities.
The ILF was established in 1988, but the government decided in 2010 that it had become "no longer appropriate or sustainable" to keep running the scheme outside the mainstream social care system.
The fund closed to new applicants soon afterwards.
One of the five applicants,  Gabriel Pepper, from Walthamstow, east London, has accused the government of imposing "appalling cuts" which were "a vicious attack on the disabled".
The claimants have said the money enables them to employ personal assistants to help them with their personal needs and to "go out and have a full life".
Richard Hawkes, chief executive of the disability charity Scope, said: "Expecting councils to pick up the tab when they are facing the biggest funding cuts in history is an impossible ask."
"Not getting the support to wash, dress and leave your home is unacceptable."

Land and Housing Minister Anna Tibaijuka had not shown "due diligence" when she took the money, he said.
Ms Tibaijuka, a former UN official, denies any wrongdoing.
She is a high-profile casualty in a corruption scandal that has rocked Tanzania's government and energy firms, straining relations with donors.
On 17 December, Attorney-General Frederick Werema resigned after MPs accused him of authorising the fraudulent transfer of about $120m to an energy firm.
He denied the allegation, but said he was stepping down because the controversy had "disrupted the country's political atmosphere".
Mr Kikwete, in a televised address, said the government was still investigating allegations of impropriety against Energy and Minerals Minister Sospeter Muhongo and his permanent secretary Eliakim Maswi.
The president's office later said that Mr Maswi had been suspended, pending the outcome of the probe.
Ms Tibaijuka rejected parliament's call for her resignation, saying the $1m was a donation for a school where she serves as the main fundraiser.
She accepted it in good faith and presented it to the school, she said.
However, Mr  Kikwete said he had dismissed her because "one of the biggest questions raised is why this money was not paid directly to the school and was instead deposited in a personal bank account in her name," Reuters news agency quotes him as saying.
Ms Tibaijuka was the executive director of the United Nations Human Settlements Programme, before she became an MP and government minister in 2010.
Tanzania's parliament, which is dominated by the ruling Chama Cha Mapinduzi (CCM) party, has been putting pressure on Mr Kikwete to sack top officials accused of siphoning government money in collusion with businessmen linked to the energy sector.
An investigation by a parliamentary watchdog committee found that about $120m had been taken from an escrow account, paid to an energy firm and then given to various government ministers.
A group of 12 donors - including Japan, the UK, the World Bank and the African Development Bank - decided in October to withhold about $490m until the government took action over the alleged corruption.
Mr Kikwete took office in 2005 with a promise to tackle corruption in government.
Five disabled people have lost their High Court challenge over the government's decision to abolish the Independent Living Fund (ILF).
[NEXT_CONCEPT]
Tanzania's President Jakaya Kikwete has fired a senior government minister accused of wrongly taking $1m (Â£640,000) from a businessman.