Incapacity benefit will be replaced by two new benefits aimed at separating claimants who are able to work from those who are unable to do so, under government plans.
Incapacity benefit, currently paid to 2.6 million people, has been the most costly budget of any benefit with an annual spend of £13bn a year.
As part of the reforms, which will be outlined in a Green Paper to be published in July, new claimants would be entitled to a “holding benefit”, paid at £55, the same level as jobseeker’s allowance, until they were assessed by a doctor within 12 weeks of their claim.
Those assessed as being unable to work would receive a new disability and sickness allowance, worth more than the current incapacity benefit rates of £74. The other claimants would go on to a rehabilitation support allowance worth about £55. This would be supplemented by more than £20 a week if claimants agree to attend work-focused interviews, training and rehabilitation.
The government also plans to extend its Pathways to Work scheme, which offers claimants of long-term sickness and disability benefits support from a personal adviser, rehabilitation support from the NHS, and a £40-a-week return-to-work credit once they get a job.