Incapacity Benefit (IB) will be abolished this year with all claimants facing reassessment as part of the Government's continued crackdown on the benefits system.
Plans to force the long-term unemployed to accept a guaranteed job or work placement if they are unable to find a position of their own have also been revealed.
Announced in its Building Bridges to Work command paper, the Department of Work and Pensions (DWP) says these measures will help deliver over £1.5bn in budget savings from welfare reform over the next four years.
From October all IB claimants will be reassessed with a new Work Capability Assessment which looks at what they can do and what help they need, rather than on whether they could do their previous job.
It expects this to mean more people will be found fit for work and claims they will be given extra intensive support from day one to help them into work.
Those still found unfit for work will move onto the new style Employment and Support Allowance with stronger conditions attached, and will also be given more personalised help so they can prepare to return to work.
Long-term Jobseekers Allowance (JSA) claimants will be given the guarantee of a job or work placement, with those who have been out of work for two years required to take up the offer.
This, says the DWP, is to prevent long term unemployment as the economy recovers and ensure that people who lost their jobs during recession aren't left to a life on benefits.
Yvette Cooper, Secretary of State for Work and Pensions believes this is a "something for something" approach which gives people more help alongside a responsibility to take it up, so that no one who is fit for work is left to a life on benefits.
"In the 80s and 90s too many people were abandoned to long term unemployment or sickness benefits, pushing families into poverty, devastating communities and hurting the economy and the taxpayer too.
"That's why it is more important than ever to press ahead with extra help and welfare reform.
"Getting people back to work is good for families, boosts local economies and helps the public finances too," she added.
