Workers may be able to still claim sickness benefits

Some people claiming sickness and disability benefits could be allowed to keep receiving payments even if they find work, under plans being considered by the government.

The proposals are aimed at getting more people back into employment.

At the moment, benefits can be reduced or withdrawn altogether when a claimant returns to work.

A source told the BBC there was to be a "radical rewiring" of how the benefits system operates.

Recent figures suggest some 2.5 million people are missing from the labour market because of medical conditions.

In his Autumn Statement last year, Chancellor Jeremy Hunt expressed concern that employment had not returned to pre-pandemic levels.

And last week, Prime Minister Rishi Sunak said the government was looking at a range of measures to tackle the issue, adding: "We need to look at how our welfare system is operating... we would like to make sure that we are supporting and incentivising people who can be, to be in work."

Work and Pensions Secretary Mel Stride has been tasked with finding ways to reduce the number of people out of work.

A health and disability white paper detailing the new plans - which are yet to be finalised - is expected in the spring.

The Times reported that the paper would recommend scrapping the "work capability assessment" system used to consider eligibility for benefits, with ministers describing it as a "perverse incentive to prove how sick you are".

It could be replaced with a process that instead asks claimants to demonstrate what work they might be able to take.

The paper also said the Treasury was considering offering tax breaks to people for entering jobs.

Labour has outlined plans to reform the system should it win power, announcing that claimants who take a job but then have to stop working within a year would not have to undergo another capability assessment in order to claim benefits again.