The Labour Government is understood to be planning more than £6billion of welfare savings which will see far tougher tests imposed for disability benefits.
This radical package of reforms will make it harder to qualify for Personal Independence Payments (PIP), freeze some payments in 2026, and change how Universal Credit is calculated.
PIP is a benefit not linked to work that helps people with the additional costs of their disability. Further savings will come from freezing PIP payments next year, so they do not rise with inflation.
Furthermore, the Government also plans to raise the basic rate for Universal Credit paid to those searching for work or in work.
At the same time, they will cut the rate for those who are judged as unfit for work. Disability activists warn that those with extreme conditions in the unfit to work category are likely to lose money under these plans.
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The DWP is preparing to make dramatic changes to the welfare state
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Meanwhile, many will be taken out of PIP payments entirely, which are designed to help with the additional cost of disabilities.
Some £1bn pounds of savings will be ploughed into employment support for job seekers.
DWP minister Liz Kendall has been forthright about the need for welfare reform, stating: "We inherited a broken welfare system that is failing sick and disabled people, is bad for the taxpayer, and holding the economy back."
According to the Work and Pensions Secretary, the current welfare system has denied support to those who need it most.
"For too long, sick and disabled people have been told they can't work, denied support, and locked out of jobs, with all the benefits that good work brings," she said.
Kendall argues that these reforms are necessary as many sick and disabled people want to work and can do so with proper support.
She emphasised that "good work is good for people for their living standards, for their mental and physical health, and for their ability to live independently."
The reforms are part of what the Labour Government calls its "Plan for Change" to deliver an 80 per cent employment rate.
Disability advocates have strongly criticised the Government's planned reforms, warning they could have devastating consequences.
James Taylor, the executive director of strategy at disability equality charity Scope, said: "Ripping PIP away will be catastrophic for disabled people." He emphasised that PIP exists because life costs more for disabled people.
"Those costs won't disappear if the Government squeezes eligibility. Many disabled people use PIP to get to and from work and to pay for essential equipment like mobility aids," Taylor explained.
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Taylor urged the Chancellor to make the right choice. "The Chancellor has a choice cut benefits and increase poverty, or invest in an equal future for disabled people."
A DWP spokesperson said: "We have been clear that the current welfare system is broken and needs reform, so that it helps long-term sick and disabled people who can work to find employment, and ensures people receive the support they need, while ensuring fairness for the taxpayer.
"Without reform more people will be locked out of jobs, despite many wanting to work. That is not just bad for the economy, it’s bad for people too.
"We have a duty to get the welfare bill on a more sustainable path and we will achieve that through meaningful, principled reforms rather than arbitrary cuts to spending.
"That’s why as part of our Plan for Change we will bring forward our proposals for reform shortly that will unlock work and help us reach our ambition of an 80 per cent employment rate."
