Sick and disabled targeted in benefit reforms

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Most sick and disabled people will have to seek work to receive maximum state benefits under welfare reforms to be announced next month.

John Hutton, the Secretary of State for Work and Pensions, has disclosed that the 2.7 million people on incapacity benefit will have to earn the right to it by taking advantage of expanded help to find work, training and rehabilitation.

"The principle will be something for something - increased support addressing people's right to work in return for an obligation for people to do what they can to return to the workplace," he said.

A green paper on welfare will propose more frequent medical tests for claimants in an attempt to stop them remaining on it for years. It will also include curbs on housing benefit and state support for single mothers, who will have to attend work-focused interviews or training when their youngest child reaches the age of 11, rather than 14 as at present.

Although targeting the sick and disabled will provoke controversy, ministers will insist that the "carrot and stick" approach is in line with Labour's traditional values. To limit the prospects of a rebellion by Labour MPs, some draconian ideas proposed by Downing Street will be dropped - including a time limit for which people can remain on incapacity benefit.

Ministers hope to wean between one and two million claimants off benefit into work, even if it is part-time. Only those incapable of any work will be exempt from the new "conditionality" rules, which are expected to take effect in 2007 if the legislation is passed by Parliament.

Although the changes could eventually cut the £7bn annual cost of incapacity benefit, Mr Hutton will argue that they are not "a cuts exercise". In the short term, existing claimants will not have their benefits reduced, and the tougher regime will apply only to new claimants. But ministers hope to transfer existing claimants to the new rules over time.

The Government will abolish the system under which jobless people are either deemed fit to work and receive jobseeker's allowance, currently £56 a week for over-25s, or classified as sick and are paid £57 a week for up to 28 weeks, rising to £68 between 28 and 52 weeks and £76 after 52 weeks. The rising scale of payments is seen by ministers as an incentive to remain on the benefit and will be scrapped.

Government sources said the new rate for incapacity benefit would be "significantly above" the jobseeker's allowance but would have to be earnt by work-related activity appropriate for the individual's condition. It could leave a new claimant who refuses to attend work-focused interviews, training or rehabilitation £20 a week worse off than under the current system - in effect, receiving jobseeker's allowance rather than incapacity benefit.

Writing in next month's edition of the Labour modernisers' journal, Progress, Mr Hutton said: "We need to help the many people with a health condition or disability who get trapped on the incapacity-benefit system. There are, of course, many who genuinely cannot work, and these people should feel secure that the state will support them."

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