Work and pensions minister Iain Duncan Smith has drawn up plans to radically simplify the welfare system.
Ministers, looking to save money amid 25% departmental budget cuts, hope to introduce a system with less room for fraud and error.
They have also been looking for disincentives to stay on benefits and make sure people are better off with a wage.
Mr Duncan Smith hopes to combine tax credits and the benefits system so that a universal benefits rate can be implemented, decreasing as people find other forms of income.
The plans would also supplement a household's budget according to circumstances and need.
The work and pensions minister has not yet produced any figures to support his proposals.