The Government is to bring in a single credit for those out of work, for whatever reason.
The credit is to be brought in over the lifetime of the next two parliaments.
Chancellor George Osborne, in his Government spending review announced the plan would receive £2bn in resources in order to be implemented.
The benefit would be introduced alongside a new work programme, designed to give intensive help and support for those out of work. This programme is to be paid for out of savings from the benefits bill and from the use of digital media, although the Chancellor gave no figures for the plan.
Osborne said: "The British people think that it is fair that we reform welfare bills."
The Department for Work and Pensions must find savings from the £200bn benefit bill on top of those identified in the Budget.
Welfare measures are expected to save £7bn per annum but low-income families with children protected from adverse effect, the Chancellor added.
