Rishi Sunak will threaten to cut benefit payments to hundreds of thousands of people with mobility and mental-health problems unless they find work they can do from home.
The prime minister will tell them to find jobs or face a benefits cut of £4,680 a year if they do not in a bid to get more people back to work, according to reports.
It comes as part of a drive to slash the government’s welfare bill, with ministers insisting that many on benefits can no longer be “written off” as incapable of working thanks to the post-Covid boom in remote working.
In September, work and pensions secretary Mel Stride launched a consultation to overhaul the government’s work capability assessments, which determine whether someone is eligible to claim universal credit instead of working.
The consultation promised to reflect “the rise of flexible and home working and better employer support for disabled people and people with health conditions”.
At the time, Mr Sunak said he wanted to "help people take advantage of modern working environments".
The response to the consultation is set to be published alongside the government’s autumn statement on Wednesday, according to The Times.
Universal credit claimants unable to walk 50 metres unaided do not have to look for a job under “limited capability for work and work-related activity” category. But this descriptor is expected to be removed, it reported.
It will mean that from 2025, hundreds of thousands of claimants will be hit by the “carrot and stick” approach.
The chancellor Jeremy Hunt last week warned as part of a wider crackdown that those who “coast” on benefits will lose handouts if they refuse to take a job.
Claimants deemed fit to work, but who fail to take steps to find employment, will be cut off from accessing benefits such as free prescriptions and dental treatment, help from energy suppliers and cheaper mobile phone packages.
The chancellor said the move, launched just days the autumn statement, was necessary to stop “anyone choosing to coast on the hard work of taxpayers”.
But the plans were condemned as hateful by senior Tories and potentially illegal by the head of Britain’s equalities watchdog.
Former deputy prime minister Michael Heseltine told The Independent that ministers should not “use the health service as a sanction”.
Tory minister Laura Trott on Tuesday brushed off suggestions that plans to encourage people with mental health or mobility problems to work from home are uncaring.
The chief secretary to the Treasury, told Sky News: "If you can work as a principle, you should work, and that is what the government believes. That’s been the thrust of all of our policies.
"Of course, there should be support for people to help them into work or to help them with issues that they’re facing, but ultimately, there is a duty on citizens that if they are able to go out to work, that’s what they should do."
Ministers are also finalising a package of tax cuts ahead of Wednesday’s autumn statement, with Mr Hunt expected to announce a cut in income tax or national insurance.
Ms Trott said the economy had turned a corner and the government “can now talk about tax cuts”.
