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Cabinet Office minister Francis Maude told the Daily Mail: "Online services are better for consumers and better for government, making services available in a convenient 24/7 format and reducing the costs of transactions."
That's all very well for the internet-friendly households but critics say the changes will discriminate against those without online access, particularly pensioners.
Six million over-65s currently don't use the internet and around 27 per cent of households have no web connection.
And the plans are already causing a rift in Government.
Lord Oakeshott, a Lib Dem Treasury spokesman, explained: "We must cut costs and boost post offices as much as we possibly can, but many millions of people - not just pensioners - are not online and never will be.
"They must never be made to feel the state treats them as second-class citizens."
The changes would be phased in gradually over the course of several years, with student loans and education benefits, such as school dinners, the first to switch entirely to online applications.
Mr Maude added that vulnerable people would be able to fill in digital forms at their local post office.
But despite the fact that for many of us the internet provides greater convenience, we can't help but wonder whether the Government is out of touch with the 27 per cent who are not connected.
And, while online services will no doubt save the country billions of pounds each year, will suppliers simply cash in with pricier bills?
What do you think? Will online-only services discriminate against those who cannot afford an internet connection? Leave your comments below...