Under the current system, those deemed too sick to work receive a higher payment than those deemed either able to work or able to do some work.
Government research found that, even accounting for changes in demographics and the benefits system, the number of people claiming the higher rates of health-related benefits increased by more than 500,000 people over the last five years.
Pledge to fix broken welfare system follows new evidence that people are worried about returning to work for fear that benefits will be withdrawn.
Officials point to a new survey carried out by the government that found 200,000 people claiming health and disability benefits who said they would be ready to work if the right job or support were available.
Liz Kendall, the work and pensions secretary, is already understood to be meeting disability groups and other welfare experts in an attempt to build support for a fundamental redrawing of the benefits system.
