Disabled people receiving the Personal Independence Payment (PIP) will be subject to regular reassessments and the majority of cases will be fixed-term payments.
There will also be a six month qualifying period and no automatic entitlement for those suffering particular impairments or health conditions.
However the replacement to Disability Living Allowance (DLA) will remain non-means tested and not taxable.
The government confirmed some of the details regarding the formation of PIP in its response to the consultation around reform of DLA.
In the reply the Department for Work and Pensions (DWP) confirmed that PIP can be claimed by disabled people whether they work or not.
There will be two components of Personal Independence Payment; a daily living component and a mobility component, each with a standard and enhanced rate.
And people suffering certain impairments or health conditions will not have an automatic entitlement to the benefit, meaning everyone will have to undergo assessment.
The government said it is not right to judge people purely on the type of health condition or impairment they may have, and it is committed to a more individualised approach to assessing an individual's claim.
It also explained the necessity for extending the qualifying period "to bring the definition of a long-term disability in line with the Equality Act 2010 and align it more closely with the qualifying rules for Attendance Allowance."
As part of welfare reform the DWP is attempting to reduce projected working-age expenditure by 20% in 2015/16.
This means reducing working-age expenditure to 2009/10 levels in real terms - £11.8 billion.
DLA is claimed by 3.2 million people at an annual cost of £12bn.
Currently more than 2 million people get the benefit indefinitely which, the government said, means there is no way of knowing if their condition has changed or if they actually need more help and support.
Maria Miller MP, Minister for Disabled People, explained: "Personal Independence Payment will be a more dynamic benefit that acknowledges that people's conditions change over time and that our understanding of how disability affects people changes too.
"So rather than having 70% of people on indefinite awards, as is currently the case with DLA, we will introduce a new fairer, more transparent and objective assessment, and, in most cases, introduce fixed term awards.
"In doing so, we need to take account of the full range of disabilities and treat people as individuals, not labelling them by impairment type, creating a truly personalised benefit that evolves over time," she added.
The consultation received more than 5500 replies, with almost 5000 of these coming from individuals.
