The move aims to address a key barrier, as 37% of disabled people and those with health conditions want to work but are held back by fears of losing financial support.
The digital ID will become mandatory for Right to Work checks and aims to stop illegal working while making it easier for people to use Government services.
This commitment follows productive discussions with Michael Tomlinson, the Minister for Countering Illegal Migration, and Kevin Hollinrake, the Minister for Business and Trade, at the Home Office.
A new cross-party report recommends allowing asylum seekers in the UK to work six months after arrival and criticises government policies for pushing migrants into poverty.