The controversial fitness-for-work tests for the sick and disabled would be overhauled by an incoming Labour government with the companies which operate them paid according to the quality of their performance.
The plans follow widespread criticism of “work capability assessments”, with opponents denouncing them as crude, inaccurate and inhumane.
With thousands of assessments overturned on appeal, the anger culminated in the French company Atos pulling out early from its £500 million contract to administer the tests.
Labour has decided it would retain the scheme which it introduced in Government and which has been enthusiastically promoted by the Coalition government.
Instead the party said it would fundamentally reform the programme to make it more flexible and sensitive to the needs of the disabled.
Rachel Reeves, the shadow Work and Pensions Secretary, told The Independent: “The Government’s flawed and discredited work capability assessment humiliates thousands disabled people.
“Labour will transform the work capability assessment to ensure disabled people who can work get the help they need to find a job and support those who can’t.”
Its announcement comes ahead of a Labour-commissioned taskforce on poverty and disability, to be published next week, which calls for reform of the treatment of disabled people.
Under the party’s proposals, new contracts to run the fitness-to-work tests would be much more closely tied to the accuracy of assessments measured by the number of times that decisions are overturned.
Labour would redesign the test, which is currently based on a computerised points system, to include a detailed analysis of jobs which individuals could carry out rather than a simple assessment of whether or not they are able to work. In addition, they would receive guidance on help locally to get them back into employment.
The party would also give the disabled a statutory role in monitoring the operation of the tests and drawing up suggestions for improvements.
Labour accuses the Coalition of not doing enough to help the disabled find suitable jobs. Around 42 per cent of people with a “work-limiting disability” are in employment in Britain, compared with more than 50 per cent in Germany, Switzerland and Denmark.
The commission been chaired by Sir Bert Massie, the former chairman of the Disability Rights Commission.
He has protested that initiatives such as the work capability assessment are “squeeze-points that are making life more difficult for disabled people” and “driving a lot of people into poverty”.