Work and Pensions minister James Purnell unveiled the reforms as part of the Welfare Green Paper, which includes a move to scrap incapacity benefits by 2013 and abolish Income Support.
People on incapacity benefit will be moved to the new Employment Support Allowance (ESA) to help them return to work, which the Government sees as a temporary measure for all but the most severely disabled.
Everyone who is able to work, including lone parents with children under seven, will be moved to Jobseekers' Allowance (JSA).
For the first time, child maintenance payments will not be taken into account when calculating the benefits that parents can receive.
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