Claimants deemed fit to work, but who fail to take steps to find employment, will be cut off from accessing benefits such as free prescriptions and dental treatment, help from energy suppliers and cheaper mobile phone packages.
The chancellor said the move, launched just days before next week’s autumn statement, was necessary to stop “anyone choosing to coast on the hard work of taxpayers”.
But the head of Britain’s equality watchdog has already said it may challenge the plans. Baroness Kishwer Falkner, chair of the Equality and Human Rights Commission, told Times Radio: “The thing about universal human rights is that you can’t discriminate. You can’t discriminate against some people by providing unequal treatment.”
Mel Stride, the work and pensions secretary, said that schemes to help people back into the workforce would also be expanded as part of a new £2.5bn five-year long back-to-work plan.
But he added that toughened sanctions would see people attempting to “[take] taxpayers for a ride” lose out.
Under the plan, claimants will be forced to accept a job or undertake work experience to improve their prospects. Those who fail to do so will be hit with an “immediate sanction”.
At the moment, claimants can face open-ended sanctions where they have their benefits stopped. Those under this sanction for more than six months will now have their claims closed, the Department for Work and Pensions (DWP) said, which would also end their access to other benefits such as free prescriptions and legal aid.
Mr Hunt said: “We’re serious about growing our economy and that means we must address the rise in people who aren’t looking for work, especially because we know so many of them want to, and with almost a million vacancies in the jobs market the opportunities are there.
“These changes mean there’s help and support for everyone, but for those who refuse it, there are consequences too. Anyone choosing to coast on the hard work of taxpayers will lose their benefits.”
Mr Stride said: “We are rolling out the next generation of welfare reforms to help more people start, stay and succeed in work. We know the positive impact work can have, not just on our finances, but our health and well-being too.
“So we are expanding the voluntary support for people with health conditions and disabilities, including our flagship Universal Support programme.
“But our message is clear: if you are fit, if you refuse to work, if you are taking taxpayers for a ride – we will take your benefits away.”
The measures will also see an increase in the amount of NHS talking therapy for those out of work.
Overall, the government says expanded help-to-work schemes will help more than 1 million people over the next five years.
Part of this package includes plans to add another 100,000 people to the Individual Placement and Support scheme, which aims to get those with severe mental illness quickly into paid employment.
Help will also be offered through “universal support”, which matches people with existing vacancies.
The reforms mean that no claimant should be unemployed for 18 months and in receipt of full benefits if they have not taken “every reasonable step to comply with Jobcentre support", the DWP said.
Mandatory work trials will be rolled out, meaning that claimants will be forced to accept a job or do work experience to improve their prospects, and those who fail to do so will be hit with “immediate sanction”.
Reform of the “fit note” system will also be explored under the plans. In a trial in certain, fit notes, an alternative to sick notes which set out what work someone can do, will be handed out by the benefits system, not doctors.
Work coaches will also digitally track a claimant’s attendance at interviews and fairs to collect “better evidence”.