The victim, known only as JT, took her fight to the Court of Appeal, as she was unable to seek damages for the abuse she suffered because she lived in the same home as her attacker before 1979.
She was abused by her stepfather, but another one of his victims did claim compensation.
Judges at the court have ruled in her favour, with Lord Justice Leggett saying the system was “arbitrary and unfair”.
The judge pointed out that JT “had no control” over the fact that she lived under the same roof as her abuser, and that cohabitation “is a feature of her situation which most people would surely regard as making her predicament and suffering even worse”.
JT was abused by her stepfather in their home between the ages of four and 17.
He was convicted of eight offences including rape and sexual assault and jailed for 14 years in 2012.
But JT was refused a payout when she applied to the Criminal Injuries Compensation Authority because of the “same-roof” rule.
Its original purpose was to ensure abusers didn’t benefit from compensation paid to victims they lived with.
In 1979 the law was changed to allow future child victims of domestic abuse to claim compensation, but the change was not applied retrospectively.
The Court of Appeal’s ruling was welcomed by children’s charities and human rights groups.
In a joint statement, Barnado’s, Liberty and Victim Support said “This victory brings us another step closer to an overhaul of the unfair and illogical Criminal Injuries Compensation Scheme.”
The statement said that, since 2015, a total of 180 applications have been refused because of the scheme, adding: “Today’s ruling paves the way for them to receive the justice they deserve, so they can move on with their lives.”
JT’s case has been brought in England and Wales with separate challenges in Scotland and Northern Ireland.
The Independent Inquiry into Child Sexual Abuse has also recommended that the rule be scrapped.
JT may only be entitled to a declaration and not compensation because changes will be a matter for parliament.