How sicknote culture costs Britain £16billion a year - despite estimates two thirds of claimants ARE fit to work

This is the cost of paying Incapacity Benefit to those who say they are too ill to work, plus other associated payments.

The Department for Work and Pensions figure, released to the BBC's Panorama programme, is £3billion a year more than previous estimates.

Scroll down for more...

Labour advisers have estimated that more than two thirds of the 2.64million claiming Incapacity Benefit - half a million of them under 35 - are able to work.

A high proportion of claimants say they have bad backs, which are notoriously difficult for doctors to disprove. Many claim to suffer from mental or behavioural disorders, in other words, stress, and 100,000 are considered too ill to work because of their heavy use of alcohol or drugs.

A benefits shake-up in October will see Incapacity Benefit replaced by Employment Support Allowance.

New claimants will face more stringent medical tests to find out what work they can do, unlike the current assessment which tests what they cannot do.

It is estimated half of applicants will not pass the new tests. But the move is expected to take no more than 20,000 people a year off the benefit lists.

Employment and Welfare Reform Minister Stephen Timms told Panorama that the reforms to get claimants off the sicknote rolls would not lead to an increase in unemployment figures.

In the 1980s many of those made unemployed by factory closures chose to claim they were ill, because the Incapacity Benefit paid better than unemployment handouts.

Over the last decade a new generation of claimants has taken advantage of the ease with which sicknote cash is paid out.

Earlier this year MPs said six million people live in homes where no one has a job. Many of them rely on Incapacity Benefit and the payouts that come with it, such as Housing Benefit and Council Tax Benefit.

Department of Health figures show that someone on Incapacity Benefit for one year is likely to stay there for eight, and once they have been claiming for two years, they are more likely to die or retire than work again.