Some young people could see reductions to the benefits they are entitled to under a radical overhaul of the welfare system to be recommended by a government-commissioned review.

As reported in the Times, Alan Milburn's year-long report, to be published on Tuesday, is expected to recommend moving under-25s off the main sickness and disability benefits.

Milburn, a former Labour health secretary, has been tasked by the government with helping reduce the one in eight 16 to 24 year-olds in the UK who are not in education, employment or training - otherwise known as "Neet".

He said on Wednesday night that his plans would not be "pain-free" and would affect both existing and new claimants.

His report is expected to say that under-25s should no longer be able to claim the health element of UK-wide universal credit - or personal independence payment (Pip), the main disability benefit in England and Wales.

Disabled people in Scotland can claim the devolved Adult Disability Payment.

Instead, under Milburn's plan, under-25s would receive an allowance on the same basic rate as universal credit.

Some could be eligible for a new "additional cost allowance" to cover day-to-day costs related to their conditions.

Some claimants would receive less under the plans - although the exact amounts will not be clear until early next year, when the government publishes legislation to implement the changes.

People can claim Pip to help them with the additional cost of being disabled or living with long-term physical or mental health conditions. It is available to those both in and out of work.

In his interim report, Milburn said survey data found that 19% of young people claiming disability or health benefits were in work.

Milburn, a Labour MP from 1992 to 2010, is also expected to recommend an investment of billions into more employment support for young people, including work placements, job subsidies and one-to-one personal advisers.

Those with more severe disabilities and unable to work would get a new benefit paid at a higher rate.

Milburn told the Times: "Candidly, it could mean that some people will get less financial support at the beginning of their benefit claim than under the current system.

"But actually, for young people, there's a different debate that we've got to resolve, which is whether the priority is their longer-term life chances or just their immediate shorter-term finances.

"I think what the current system does [is] it prioritises the latter over the former. I believe that's the wrong choice and it needs to be the other way around."

Just under one million young people in the UK are Neets, data from the Office for National Statistics (ONS) from April to June suggests. This was a rise of 3% on the same period last year.

Milburn's recommendations are likely to be backed by Prime Minister Andy Burnham but could prove controversial among Labour MPs, who opposed welfare changes last year under his predecessor Sir Keir Starmer.

Dame Meg Hillier, who helped spearhead a backbench rebellion against Starmer's reforms, suggested she and her colleagues were broadly supportive this time around.

"What happened last year was a cut was being proposed and none of us could explain to people what would happen to them," the Labour MP told the BBC.

"Milburn has done some very good work on this so I'm giving him a fair wind," she added.

But Bell Ribeiro-Addy, one of the Labour backbenchers who revolted last year, said she was "not sure" she could vote to cut the benefit entitlement of existing claimants.

Tom Ashforth, a 19-year-old student at Sheffield Hallam University, receives both components of Pip at the higher rate.

He said the financial support helps him manage additional expenses linked to his visual impairment, including prescriptions, mobility aids and accessible learning resources.

"If I were to lose it, I would struggle to afford essential things," he said.

He said he believes decisions over disability benefits should be made on a case-by-case basis, rather than according to age.

"You cannot assume that everyone under the age of 25 is in the same position," he said.

In his Times interview, Milburn acknowledged that changing the rules for existing claimants would be "difficult politically" but stressed it was necessary.

James Taylor, from disability equality charity Scope, said Pip was a "lifeline" and restricting access to it "won't make young disabled people's extra costs disappear".

Harriet Edwards, from the charity Sense, said changes were "long overdue", but that without additional details, families were "deeply anxious".

A government spokesperson said: "We will always ensure there is a safety net for the most vulnerable and those who are unable to work."

The reforms would represent a radical overhaul of Britain's welfare system, at a time when there is heavy political pressure for the UK to find the money to spend more on defence.

Responding on Thursday, Conservative leader Kemi Badenoch said the government should not be spending "lots of time" on employment schemes, which she said would ultimately fail.

If Milburn's recommendations were approved, it could take almost a decade for the British state to see monetary savings.

The new system "will need significant investment" and would involve "rebuilding the system from scratch", Milburn said.

His new proposed system would involve an element of carrot and stick, wherein young people could lose some of their benefits if they did not engage with the extra work support options.

In an interview recorded on Tuesday, Skills Minister Jacqui Smith told the BBC that young people had a "responsibility" to take up employment support.

"It is a contract. People need the chance, and they need to take that chance," she added.

A separate review - co-chaired by disabilities minister Sir Stephen Timms - examining disability benefits is also expected to be published this month.

Additional reporting by Rahib Khan

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