About 700,000 claimants of a disability benefit will not be transferred to the new Universal Credit before 2017, the Government has said today.
In a written statement to MPs, Work and Pensions Secretary Iain Duncan Smith outlined the next stage of the roll-out for the new benefit to communities across the north west of England.
But the Department for Work and Pensions said about 700,000 claimants of the Employment and Support Allowance would not transfer to the new system by the 2017 deadline.
The cohort on Employment and Support Allowance (ESA) will continue to receive the same service as currently and, if appropriate, will be helped back to work by job centres.
But those assessed as unable to work due to long-term conditions will not be transferred to Universal Credit, a broad reform which wraps up six different benefits into a single monthly payment.
The Universal Credit reforms are intended to help people back into work but the Department for Work and Pensions said its priority throughout had been the "safe and smooth" delivery of the new policy.
In a statement, the department said this took "precedence over meeting specific timings".
Mr Duncan Smith told the BBC the civil servant tasked with delivering Universal Credit, Howard Shiplee, would play a key role on decisions relating to Employment and Support Allowance claimants.
He said: "We may take a little longer on those who are already in, say, ESA, who have no work requirement on them because they are a very vulnerable group and therefore Howard Shiplee may say we want to take a little more time on them because they need to be processed carefully and dealt with carefully.
"But essentially Universal Credit as a benefit will be the benefit by 2016 and the remains of the vast, vast majority of the stock will be in place pretty much by the end of 2017."
In a press statement, the Secretary of State added: "This is a once-in-a-generation reform. And we're going to get it right by bringing it in carefully and responsibly."
In his statement to MPs, Mr Duncan Smith said the Department for Work and Pensions would continue to develop the IT systems supporting Universal Credit, adding it "will be capable of delivering the full scope of Universal Credit and make provision for all claimant types".
And commenting on the expanded roll-out in the North West of England, he added: "This will enable us to learn from the live running of Universal Credit at scale and for more claimant types, including the vulnerable and complex."
A department spokesman said it was not a pilot but a roll-out of the scheme.
Mr Duncan Smith said it was still expected the new benefit would be available across the country by the of 2016 and the "majority" of legacy cases would be on the new system by the end of 2016.
"Final decisions on these elements of the programme will be informed by the development of the enhanced digital solution," the Secretary of State told MPs.
Shadow work and pensions secretary Rachel Reeves said: " On the morning of the Autumn Statement this is yet another shambolic announcement from this out-of-touch Government.
"Iain Duncan Smith has today admitted what everyone has known for months - that Universal Credit is massively behind schedule. But just a couple of weeks ago he was telling Parliament the Government would 'roll out Universal Credit on the plan and programme already set out'.
"It's clear that David Cameron and Iain Duncan Smith have completely failed to get to grips with their flagship welfare reform and millions of pounds of taxpayers' money have been written off as a result.
"Families facing a cost-of-living crisis deserve better than this."
Shadow Chancellor Ed Balls taunted Mr Duncan Smith, commonly known as "IDS", saying universal credit was "in deep shambles".
Responding to Chancellor George Osborne's Autumn Statement in the House of Commons, Mr Balls said: "With almost one million people unemployed, a record number who want to work full-time being forced to accept part-time work, the Work Programme has flopped, the welfare bill rising and as we have learned today the universal credit in complete and utter shambles.
"No mention of the universal credit in this statement. IDS - in deep shambles."