Ministers attempted to get their welfare reform programme back on track yesterday after it emerged that billions of pounds are being paid out in incapacity benefit to people suffering stress, fatigue and even acne.

Peter Hain, the Work and Pensions Secretary, said that a new, tougher test on who will qualify for the benefit would cut the number claiming the benefit by 20,000 a year. The Department for Work and Pensions also rushed out a technical assessment on how the test will operate when it comes into force next year.

The report was published after The Times revealed that thousands of people with vague conditions such as dizziness claim incapacity benefit, and at least 2,000 receive it because they are judged to be too fat to work. The data show that many people who go on to benefit never work again. The figures, obtained under freedom of information legislation, disclosed the full list of ailments from which the 2.7 million people claiming £7.4 billion in incapacity benefit suffer.

The list numbered 480 conditions, with one quarter of claimants classified as having “unknown and unspecified” complaints.

The Conservatives said that Mr Hain had announced his pledge to tackle “sicknote Britain” twice this month already, and the latest measures were too small to counter the problem. “Today’s announcement involves 20,000 fewer people claiming incapacity benefits. This represents less than 1 per cent of the 2.6 million people currently claiming the benefits,” Chris Grayling, the Shadow Work and Pensions Secretary, said.

The Government has made several attempts since 1997 to cut the number claiming incapacity benefit. But the latest, passed in an Act this year, scraps the benefit. It will be replaced by the employment and support allowance next October, although only new applicants will be eligible.

The new test will be tougher and will also have more rigorous measurement of mental health conditions in an attempt to cut the number suffering from depression and stress from staying out of work indefinitely.

However, charities representing disabled people and employers’ organisations were sceptical about how the new regime would work. The Work Foundation said that the Government had to be clearer with companies about the need to hire more disabled people.

David Coats, its associate director, said: “Hard-to-reach groups require sustained, high quality professional help with soft skills and work-readiness, and employers who are prepared to help them make a go of their working lives.”

Incapacity benefit

— Fill in points-based personal assessment form on physical or mental health (eg, cannot answer phone and take message: 2 points)

— Obtain proof from doctor that you are unable to work

— Some applicants are then required to undergo a medical examination

— If the applicant is judged eligible, the medical examiner will decide if the condition is likely to change

— If dissatisfied with outcome, the applicant can appeal within a month

Employment allowance

— All applicants will undergo a personal capability assessment

— Tighter rules in place, eg, immobility will be judged as unable to walk 50 metres rather than 30 metres at present

— New, more detailed criteria for measuring mental health problems

— Assessment will focus on what applicants can do despite their condition, eg, keyboard skills

— Terminally ill to be fast-tracked

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