The Department for Work and Pensions and the Local Government Association have named fifteen local authorities in England recommended as potential pilot sites for Universal Credit.
The pilots will focus on providing face-to-face and online support in a bid to help with budgeting and job searches, reducing fraud and error, and reducing homelessness.
The DWP will now make a final selection of those that will go ahead in the Autumn.
Lord Freud, minister for welfare reform, said: "Local authority-led pilots will provide an opportunity for councils to shape the development of Universal Credit.
"All the recommended local authorities have offered ideas on how they might help people with their claims for Universal Credit and progress into work."
The final list is expected later in the summer.
Sir Merrick Cockell, chairman of the LGA, said it was vital people were fully supported when the benefit and tax credit changes came in.
He added: "Councils have a central role to play in providing face-to-face assistance and advice in the new welfare system, as they have a strong understanding of local job markets."
The LGA recommended the 15 local authorities out of 38 proposals:
Bath and North East Somerset
Hammersmith and Fulham (in consortium with Kensington and Chelsea, Wandsworth and Westminster)
Newcastle under Lyme
A consortium of North Yorkshire authorities led by Scarborough
West Lindsey; and
A separate selection process is underway for local authorities in Wales and Scotland.
Universal Credit will be rolled out from October 2013. Approximately 12 to 13m tax credit and benefit claims will be taken away and replaced with the system.