Only one in 14 people assessed for the new incapacity benefit is entitled to claim the hand-out in the long-term, new figures reveal.
Statistics show 39% of claimants are fit to work, while more than a third drop their application before it is complete.
The Department for Work and Pensions said 17% can do some work with the right help and support. Only 7% of first-time claimants are deemed too ill to work and are entitled to claim the Employment and Support Allowance (ESA) having undergone the Government's new assessment.
Work and Pensions Minister Steve Webb said: "These figures show that many people are able to work with the right help. We have strengthened the support now available, tailoring it to individual needs so they can overcome whatever barriers they face."
Under the last government, those claiming benefits because they thought themselves unfit to take up employment were asked to complete a work capability assessment to find out whether they could do a job.
The scheme was piloted in Aberdeen and Burnley in 2008 before being rolled out across the country. Officials have now started assessing those trying to make new claims to see if they are eligible for ESA, which has replaced incapacity benefit.
Under the new assessment, applicants are either judged too ill to work and receive the benefit or are judged well enough to hold down a job and then told to resubmit a benefits application but this time for Jobseeker's Allowance. The reforms, brought in under the last Government, also include a third category for those whom officials think could do some work if they received the right help and support.
TUC general secretary Brendan Barber said: "The new incapacity benefit assessment is a much tougher test than previously and is designed to save the Government money by excluding more people. It is therefore unsurprising that more disabled people have been declared fit for work. These figures certainly don't suggest that thousands of disabled people are suddenly 'trying it on' .
Prime Minister David Cameron said: "For too long in this country we have left people on welfare for year after year when those people, with help and with assistance, could work, and so we're producing a much better system where we really put people through their paces and say that if you can work, you should work."
Alice Maynard, from the disability charity Scope, said: "If the Government's aim is to get more people working, feeding negative assumptions about disabled people won't help achieve this. Rather than expending energy smearing claimants, the Government needs to re-think its Work Capability Assessment, so that it captures the multiple, complex barriers to finding jobs and points people towards the right kind of support."