Government plans to shake up incapacity benefits could make more candidates available to talent-starved recruiters.

Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), predicts that one in three incapacity benefit claimants could be brought back on to the job market under the new system.

Alan Johnson, the secretary of state for work and pensions (pictured), has indicated that there will not be a cut in benefit payments, but that payments will remain flat the longer a person is on it, rather than increasing.

“This will not only ease recruitment difficulties in a tight labour market but also represents a compassionate response to the problem of long-term welfare dependency,” said Philpott.

At present, the benefit structure gives people an incentive to remain on the scheme, rather than looking for work. The new structure will require claimants to keep in regular contact with a personal adviser about their job prospects, and will offer them a ‘return to work’ credit of up to £40 a week.