In a Commons statement, Kendall said she was announcing the ‘largest ever opportunity for sick and disabled people'.

She said: ‘This is a substantial package of measures which will save £5bn by 2030.'

The minister said Personal Independence Payments (PIP) will no longer be means tested but eligibility will be narrowed.

People will need to score a minimum of four points in one category to qualify for the daily living element of PIP.

In addition, Kendall promised a ‘permanent, above-inflation rise' to the standard allowance of universal credit.

Kendall said there would be more face-to-face assessments for benefits while those with severe disabilities would never be reassessed.

The work capability assessment for universal credit is to be scrapped in 2028.

A right to work scheme so people do not ‘fear this will put their benefits at risk', will also be introduced.

Kendall pledge the Government would deliver personalised support to sick and disabled people who can work to get the jobs they ‘need and deserve'.

Shadow work and pension secretary Helen Whately said: ‘This is too little, too late'.

Whately added Labour ‘needed to be tougher'.

Reaction 

Joseph Rowntree Foundation chief executive Paul Kissack said: ‘Ideas like the Right to Try Guarantee help to remove the barriers that prevent people from working but enormous cuts mean the Government risks undermining these positives. Making it harder for people to qualify for support, or cutting their support, puts more pressure on people who are already struggling to cope.

‘Ministers should boost the basic rate of Universal Credit without taking the extra support from the pockets of disabled people receiving UC health. It should be funded by those with the broadest shoulders.

‘A government that came to office pledging to end the moral scar of food bank use clearly should not be taking steps that could leave disabled people at greater risk of needing to use one.'

Unison general secretary Christina McAnea said ‘going after disabled people and vulnerable families is not the way to get the UK economy back on track, nor out-of-work individuals back into jobs'.

‘The Government must listen to concerns and row back on some of its plans. This is not the way to fix the UK's fortunes.'

Tom Waters, an associate director at IFS said: ‘This package is a fundamental break from the past few decades of welfare policy. The increase in basic out-of-work support, while not very large, is the biggest permanent real terms rise since at least 1980. With it is promised even higher support in the period shortly after job loss in the form of contribution-based unemployment insurance. At the same time the health-related benefit system will be tightened, cut, and entitlement will no longer depend upon whether you can work or not. The hope is more employment and fewer people in the disability and incapacity benefit system. The risk is that it's precisely the individuals receiving health-related benefits that are least responsive to financial incentives to work, and perhaps most in need of extra financial support.'

Interim chief executive of NHS Providers, Saffron Cordery, said: ‘Trust leaders will understandably be concerned about the knock-on impact of today's announcement for people with mental health conditions and demand for already overstretched mental health services.

‘It is vital that the knock-on effects of today's announcement are fully assessed alongside further investment in preventative services and steps to tackle the other complex factors underpinning economic inactivity across the country.'

David Finch, assistant director at The Health Foundation, welcomed measures to rebalance the benefits system to support people to stay in work but warned cuts to disability benefits risked undermining this new approach.

‘The Government has stated that it aims to restore trust in the benefits system, but this will be challenging with proposed cuts to benefits that will leave many people facing anxiety, financial insecurity and at risk of worsening health,' Finch said.