The Government is considering drastically cutting Employment and Support Allowance (ESA), internal documents seen by the BBC suggest.
New claimants, placed in the work related activity group could be given just 50p more per week than people on job seekers allowance (JSA).
Those receiving JSA, who are aged 25 or over, currently get £72.40 per week.
ESA claimants in the work related activity group receive £28.75 per week more.
In a statement the DWP said the ESA proposals were not Government policy.
Dame Anne Beg MP, Chair of Work and Pensions Select Committee, says cutting the benefit would be a "real blow" for recipients She added that while she would support overhauling the delivery of ESA but "did not envisage" any reduction in the value of the benefit.
The BBC says other papers reveal that the Government has also been forced to hire extra staff to clear the backlog on the benefit.
Some 100 healthcare professionals are being hired to carry out work capability assessment tests. The staff, who will be employed through the Pertemps agency, will help to reduce a backlog of more than 600,000 cases.
They will be in addition to any extra staff brought in when the new contractor, Maximus, replaces ATOS in March 2105.
For further information see www.bbc.co.uk/news/uk-politics-29821696