The government will publish the welfare reform bill today, setting out sweeping changes to the welfare system.
The changes are designed to "make work pay" and encourage work over claiming benefits.
The government wants to challenge what it describes as a "benefit culture" in the country, which has seen significant numbers of people claiming unemployment benefits in periods of economic expansion.
The plans include a "universal credit" to replace the many separate payments that exist under the current system.
Those who turn down a job will face a three-year loss of benefits and there will be an annual benefit cap of £26,000 per family.
The government has also backtracked on plans to cut housing benefit by ten per cent for anyone unemployed for over a year.