The UK government's flagship welfare reform will miss its deadline, according to the Secretary of State for Work and Pensions.
The Universal Credit (UC) roll-out, which is designed to make welfare simpler by brining six benefits and tax credits into one, will miss its 2017 target.
Iain Duncan Smith, who has already pushed the reform's deadline back, said 700,000 Employment and Support Allowance recipients will be moved to UC after 2017.
"This is a once in a generation reform. And we're going to get it right by bringing it in carefully and responsibly," said Duncan Smith.
He added: "Our approach will ensure that while we continue to enhance the IT for UC, we will learn from and expand the existing service, so that we fully understand how people interact with it, and how we can best support them."
Rachel Reeves MP, Labour's Shadow Work and Pensions Secretary, slammed Duncan Smith and Prime Minister David Cameron over the delay.
"It's clear that Cameron and Duncan Smith have completely failed to get to grips with their flagship welfare reform and millions of pounds of taxpayers' money have been written off as a result. Families facing a cost-of-living crisis deserve better than this," she said.
Duncan Smith announced the news before the Autumn Statement 2013.
The update comes after research revealed UC recipients are more likely to seek additional funds on top of the benefit, than compared to those on Job Seekers Allowance (JSA).
The survey, which was commissioned by the Department for Work and Pensions, found 15% more claimants of UC receive financial assistance from other sources than their benefits than compared to those on JSA.
Conducted by research company IFF, it questioned 901 claimants over four UC pathfinder areas in Greater Manchester, as well as 1,800 new JSA recipients who would be eligible for UC if they were living in the pathfinder areas.
The research found a larger percentage of UC claimants (34%) than JSA claimants (19% JSA comparison, 26% JSA national) had obtained additional funds on top of their benefit payments.
In particular, of those who sought out additional funds, the study found a quarter (25%) of UC claimants received financial assistance from their families and friends, but only 17% from the JSA comparison group adopted this approach.