Free prescriptions and legal aid will be cut off for benefit claimants who are deemed fit to work and do not seek employment as part of a Government crackdown.
Digital tools will also be used to “track” attendance at job fairs and interviews under the toughened sanctions regime, the Treasury has said.
Chancellor Jeremy Hunt said the measures were necessary to prevent “anyone choosing to coast on the hard work of taxpayers” from receiving benefits.
The changes are part of the Government’s £2.5 billion back-to-work plan, which it hopes will help up to 1,100,000 people look for and stay in employment.
This includes people with long-term health conditions, disabilities and the long-term unemployed.
Opposition critics said the proposals would do nothing to fix the health service or unemployment, while campaigners said the sanctions crackdown was “deeply worrying” and could worsen mental illness.
Asked by journalists how denying access to free prescriptions would help to get people into employment, Downing Street said: “The approach does not take away the support and safety net that is rightly there for people that need it… It’s right that benefits are conditional on claimants meeting their reasonable work search responsibilities and it’s unfair that those in employment should subsidise the benefits of those who can work but choose not to.”
Ministers have said they will also expand support to encourage jobseekers finding and staying in work, including increasing the number of people receiving NHS talking therapy by 384,000 over the next five years.
Plans to add another 100,000 people to the Individual Placement and Support (IPS) scheme, which aims to get those with severe mental illness quickly into paid employment and offer continued support them once in post, are also in the package.
Help will also be offered through Universal Support in England and Wales, the Government said, by matching 100,000 people per year with existing vacancies and supporting them in their new roles.
Work and Pensions Secretary Mel Stride said that while an expansion of certain support schemes would be rolled out, toughened sanctions would see people attempting to “(take) taxpayers for a ride” losing their benefits.
Mandatory work placement trials will be introduced, meaning that claimants will be forced to accept a job or undertake work experience to improve their prospects, and those who fail to do so will be hit with “immediate sanction”.
A new “function” will also be introduced to the Universal Credit service which will enable work coaches to digitally track a claimant’s attendance at interviews and fairs to give them “better evidence” of an individual’s job search activities and leave those who do not attend open to sanctions, the Government said.
People who are deemed to have disengaged will be targeted, with individuals on an open-ended sanction for more than six months and solely eligible for the Universal Credit standard allowance having their claims closed.
This would end their access to other benefits such as free prescriptions and legal aid.
Mr Hunt said: “We’re serious about growing our economy and that means we must address the rise in people who aren’t looking for work, especially because we know so many of them want to, and with almost a million vacancies in the jobs market the opportunities are there.
“These changes mean there’s help and support for everyone, but for those who refuse it, there are consequences too. Anyone choosing to coast on the hard work of taxpayers will lose their benefits.”
Mr Stride said: “We are rolling out the next generation of welfare reforms to help more people start, stay and succeed in work. We know the positive impact work can have, not just on our finances, but our health and wellbeing too.
“So we are expanding the voluntary support for people with health conditions and disabilities, including our flagship Universal Support programme.
“But our message is clear: if you are fit, if you refuse to work, if you are taking taxpayers for a ride – we will take your benefits away.”
The announcement forms part of the Government’s wider plans aimed at growing the economy expected in the autumn statement next week.
Shadow work and pensions secretary Liz Kendall said: “This poor excuse of a proposal does nothing to fundamentally change the state of our health service or our Jobcentres after a decade of failure from the Tories.
“A record 7.8 million people are still stuck on NHS waiting lists and 2.6 million people are trapped out of work due to long term sickness, with the increase since the pandemic alone costing the taxpayer an extra £15.7 billion a year.
“A healthy nation is critical to a healthy economy. But look beneath the bonnet of today’s announcement and you will see more of the same: a failing approach that doesn’t even scratch the surface of the problem.”
Liberal Democrat Treasury spokeswoman Sarah Olney MP said the Government seemed more interested in “penalising people than helping them get back into work.”
“This Government doesn’t understand that thousands of people with long-term health issues are desperate to get back to work, but Ministers’ failure to tackle NHS waiting lists is stopping them,” she said.
“This announcement does absolutely nothing for these people.”
The British Chambers of Commerce welcomed the changes but said “there must be a focus on getting (people suffering ill health) into work they want to do.”
Alex Veitch, director of policy at the BCC, said: “Getting this right could help fill hundreds of thousands of jobs and provide a big boost to the economy.”
Vicki Nash, associate director for policy and campaigns at mental health charity Mind, said: “Poverty and mental health problems form a vicious cycle that need to be tackled by every part of government working together.
“Today’s announcements look like they have come from departments working on different planets.
“We welcome the UK government making real investment into empowering more people with mental health problems to find work in a way that supports them to get better. And with close to two million people on waiting lists for mental health treatment, investing in talking therapies is the right move.
“The increase in the use of sanctions is deeply worrying though – evidence has repeatedly shown they don’t work and make people’s mental health worse. Changes to sick notes will also make it tougher to be signed off from work and could mean people don’t get the time they need to recover.”