Incapacity benefit must be radically reformed if the government wants to achieve its full employment and social justice goals, according to a new report.
The Institute for Public Policy Research paper published on Monday concluded that incapacity benefit has become a barrier to work.
The think tank said the fact that claimants must demonstrate that they are incapable of work and therefore risk losing their benefit if they look for a job prevents many from getting back into employment.
The report also found the benefit is failing to ensure a decent standard of living for people with a health problem or disability who cannot work, with the average payments of around £4,200 a year.
Kate Stanley, IPPR senior research fellow, said: "Incapacity benefit has become a barrier to work. Once people have been claiming incapacity benefit for a year, the average duration of their claim is eight years, and once people have been claiming for two years they are more likely to die or retire than to leave the benefit for a job.
"Many claimants fear that taking steps towards employment may place their benefits at risk, and that returning to work will place any future claim at risk.
"It also fails to provide a decent income for people who are unable to work because of long-term health problems or disability.
"A new benefit structure is needed which promotes employment opportunity but also guarantees security and dignity for those who cannot work.
"The idea of reducing the number of claimants or time limiting the benefit in order simply to make public spending savings is not an acceptable motive for reform. Such an approach could lead to entrenched poverty."
Last week work minister Jane Kennedy told ePolitix.com that reducing the number of people claiming the benefit was a government priority.
She said: "Many of them [those on incapacity benefit] think they can't work, they've been told by their GP they can't and the very name of the benefit invites them to think that they are incapable.
"Because large numbers of this group have stress related illnesses and things like that there is a high proportion of them that could, with help, return to work."
