Some young people could see reductions to the benefits they are entitled to under a radical overhaul of the welfare system to be recommended by a government-commissioned review.
As reported in the Times,, external Alan Milburn's year-long report, to be published on Tuesday, is expected to recommend moving under-25s off the main sickness and disability benefits.
Milburn, a former Labour health secretary, has been tasked by the government with helping reduce the one in eight 16 to 24 year-olds in the UK who are not in education, employment or training – otherwise known as "Neet".
He said on Wednesday night that his plans would not be "pain-free" and would affect both existing and new claimants.
His report is expected to say that under-25s should no longer be able to claim the health element of universal credit or personal independence payment (Pip).
Instead, they would receive an allowance on the same basic rate as universal credit.
Some could be eligible for a new "additional cost allowance" to cover day-to-day costs related to their conditions.
Some claimants would receive less under the plans – although the exact amounts will not be clear until early next year, when the government publishes legislation to implement the changes.
People can claim Pip to help them with the additional cost of being disabled or living with long-term physical or mental health conditions. It is available to those both in and out of work.
Of the four million people claiming Pip in England and Wales, around 430,000 are aged between 16 and 24.
In his interim report,, external Milburn said survey data found that 19% of young people claiming disability or health benefits were in work.
Milburn, a Labour MP from 1992 to 2010, is also expected to recommend an investment of billions into more employment support for young people, including work placements, job subsidies and one-to-one personal advisers.
Those with more severe disabilities and unable to work would get a new benefit paid at a higher rate.
Milburn told the Times about his report: "Candidly, it could mean that some people will get less financial support at the beginning of their benefit claim than under the current system.
"But actually, for young people, there's a different debate that we've got to resolve, which is whether the priority is their longer-term life chances or just their immediate shorter-term finances.
"I think what the current system does [is] it prioritises the latter over the former. I believe that's the wrong choice and it needs to be the other way around."
Just under one million young people in the UK are Neets, data from the Office for National Statistics (ONS) from April to June suggests. This was a rise of 3% on the same period last year.
Milburn's recommendations are likely to be backed by Prime Minister Andy Burnham but could prove controversial among Labour MPs, who opposed welfare changes last year under his predecessor Sir Keir Starmer.
Labour backbencher Bell Ribeiro-Addy said she was "not sure" she could vote to cut the benefit entitlement of existing claimants, adding that opposition to this idea had been a factor in last year's welfare rebellion.
Speaking to BBC Radio 4's Today programme, she also argued that Pip often helped disabled people who were already in work to live independently.
"I don't think you get a disabled young person into work by taking away the money that helps them get into work," she added.
The reforms would represent a radical overhaul of Britain's welfare system, at a time when there is heavy political pressure for the UK to find the money to spend more on defence.
If Milburn's recommendations were approved, it could take almost a decade for the British state to see monetary savings.
The new system "will need significant investment" and would involve "rebuilding the system from scratch", Milburn said.
He added that currently "you've got hundreds of thousands of young people stuck in a benefit system that is trapping them in poverty, giving them no prospect of prosperity or a job".
His new proposed system would involve an element of carrot and stick, wherein young people could lose some of their benefits if they did not engage with the extra work support options.
"A deal isn't a deal unless there are potential consequences," Milburn said. "Entitlements and responsibilities are two sides of the same coin."
Housing Minister Matthew Pennycook told BBC Breakfast he could not confirm what was in report, but he backed the "principle" of providing more intensive employment support to those out of work.
"The prime minister has been very clear the status quo isn't working – we need a new settlement for young people… tinkering will not do it," he added.
A government spokesperson said: "We will always ensure there is a safety net for the most vulnerable and those who are unable to work."
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