The new Employment and Support Allowance (ESA) replaces incapacity benefit from today as part of the government's shake-up of welfare reform.
The ESA is seen as crucial in achieving the government's aim of getting one million people off incapacity benefits by 2015.
New claimants will have their capability for work assessed by health professionals, designed to look at what people can do, rather than what they can't. People will also be required to take part in a back-to-work programme, including having a skills check and getting involved in work experience opportunities.
People who are assessed as having the severest disabilities or health conditions will go into the 'support group' and receive more money everyone else will go into the 'work group'.
Work and pensions secretary James Purnell said: "The introduction of ESA will offer the help and support disabled people and people with ill health are telling us they want in order for them to get back to work."
The ESA only applies to new claimants incapacity benefit and income support continue in payment for existing claimants.
Susan Scott-Parker, chief executive of the Employers Forum on Disability, said: "We know from the experience of our members that it makes business sense for everyone when disabled people successfully move from benefits into work.
"Employers and intermediary agencies like Jobcentre Plus will need support with practicalities if they are to become disability confident. We look forward to working with the government to help shape these services to make them relevant to employers."