Ministers are working up sweeping plans for welfare changes, including scrapping a key disability benefit for under-25s and replacing it with a multibillion-pound package of support to get into work. This was reported by Qazaqyia.kz citing The Guardian.

Whitehall sources said the package of changes under debate was much bigger than previously thought, as Andy Burnham’s government hopes to persuade more people on benefits back into work.

The move could be fraught with political danger after last year’s dramatic welfare rebellion by Labour MPs. But ministers have spent weeks trying to persuade them the plans are about reform, and feel confident opposition has waned.

The plans are still awaiting the conclusions of reviews by Alan Milburn, who is looking at young people’s employment, and the Timms panel, which is examining the personal independence payment (Pip), a non-means-tested benefit that helps sick and disabled people with support costs.

However, a central option under consideration for young people is removing the health element of universal credit for claimants under 25, which has already been almost halved to £217 a month, and offering intensive support for people to get into work. The possibility of removing it for existing claimants – not just new ones – is being looked at.

The extra support will include subsidised jobs for younger people, more targeted “back to work” schemes and support with mental health, as part of a drive to help more of the nation’s one million 16 to 24-year-olds not in education, employment or training (Neets) back into the workplace.

As part of the same package, officials are looking at a new system to replace the Pip, which is claimed by four million people, after attempts to change existing eligibility criteria were rejected by MPs last year.

One possible plan is for a separate regime to apply to the under-25 age group, with reduced or withdrawn entitlements – although those with the most severe and debilitating disabilities would not lose any money.

More broadly, officials are working up plans under the replacement system for a new set of eligibility criteria and assessments for the extra costs of disability, and looking at whether this would apply to all claimants of working age, or those below a cut-off point such as 50 or 60. Again, those with the most severe conditions would not lose money or be reassessed.

Officials have also been returning to the idea of cuts to the Motability scheme at a future budget, after axing tax breaks worth £300m. The scheme allows disabled people to use their Pip benefit to lease new cars for three years.

One Whitehall source said removing or further cutting the health element of universal credit for those older than 25 had been considered, but government sources said this was not on the table.

Officials have looked at systems in other countries, such as Denmark, which restricts access to its “disability pension” for under-40s, who instead are given help with flexible jobs and training unless they have no ability permanently to work.

A government source said: “We will be bringing forward a comprehensive package of support and reform to tackle the scandal of a million young people not in education, employment or training. The details are yet to be decided, but we are committed to enabling work and opportunity, while always protecting those unable to work.”

The significant changes would need legislation, with ministers and officials looking at a bill encompassing the replacement for Pip and changes to the under-25 system to be presented in the next session of parliament next year.

Pat McFadden, the work and pensions secretary, used his conference speech this week to describe changing the welfare system as a “moral crusade”, saying too many younger people were stuck claiming benefits for too long.

However, the scale of the plans could reignite concerns among Labour MPs about the impact on the cost of living for disabled people, particularly when Pip is a non-means-tested benefit that is unrelated to a person’s employment status.

Kemi Badenoch, the Conservative leader, has gone further by saying she would ban young people from signing straight on to the benefits system if her party won the next election, as part of a plan to cut £23bn from the welfare bill. Under-25s with less than six months of continuous employment would no longer be able to claim universal credit and would instead have to undergo intensive job coaching.

Reform UK plans to cut the overall welfare bill by £50bn, with Pip replaced by another cash benefit that would be restricted to only the “gravely ill and severely challenged”, while “lower level conditions” would get support overseen by local authorities.

Polling suggests that while the public favours cutting the welfare bill overall, they