The Child Poverty Action Group says it won't challenge a Court of Appeal decision on the Working for Families tax credit.
Earlier this month, the court dismissed an appeal against a ruling declining to have the tax credit declared unlawful under human rights legislation.
The group says the in-work tax credit discriminates against children in beneficiary families because it is available only to working parents.
Spokesperson Susan St John says they have no confidence the Supreme Court would give a different answer to the other courts.
She says the courts are simply not equipped to understand how many children are being seriously harmed by the policy which was perpetuating child poverty.
Ms St John says the Child Poverty Action Group now hopes to make this policy an election issue.