Universal credit will be scrapped if Labour wins power, Jeremy Corbyn has announced, arguing the move will prevent 300,000 children falling into poverty.

The Labour leader ended uncertainty over the party’s stance, vowing the “worst aspects” of the bungled benefit would be reversed immediately – with an entirely new system in place within a parliament.

The much-criticised Department for Work and Pensions will also disappear, to be replaced by a department for social security, charged with treating people with “dignity and respect”.

“Universal credit has been an unmitigated disaster,” Mr Corbyn will say – in a speech to be delivered in the Essex constituency of Iain Duncan Smith, the former minister who introduced it.

“As well as being behind schedule and over budget, it is inhumane and cruel, driving people into poverty and hardship.”

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Some Labour ministers had suggested universal credit could merely be reshaped, rather than scrapped outright, but Mr Corbyn pledged sweeping “immediate” changes to:

* End the two-child limit for receiving the benefit, which official figures show has affected almost 600,000 children.

* Pay the benefit after two weeks – after repeated criticism of the DWP for failing to end five-week waits, as promised.

* Allow ‘split payments’ – after warnings that single household payments penalise women, particularly those at risk of domestic violence – and pay the child element to the primary carer.

* Make payments directly to landlords, as with housing benefit, after an explosion in debt owed by vulnerable tenants.

* End the ‘digital only’ requirement, arguing it penalises who are not computer literate, recruiting 5,000 additional advisors to deliver the change.

Mr Corbyn will announce that Labour will also end the overall benefit cap, set at £20,000 a year outside London, and suspend the “punitive sanctions regime” for claimants failing to comply with DWP rules.

“When a Labour government takes office, we will introduce an emergency package of reforms to end the worst aspects of universal credit,” he added.

“And we will introduce a new system that will be based on the principles of dignity and respect – and it will alleviate and end poverty, not drive people into it.”

The Child Poverty Action Group has warned that the two-child limit will plunge 300,000 more children into poverty by the time universal credit is fully rolled out in 2024.

Therese Coffey, the new work and pensions secretary, has said nothing about universal credit since taking the job in late July, despite pressure to stop its extension to up to three million more people.

Her predecessor, Amber Rudd, admitted in February that universal credit was likely to be the main cause for claimants seeking emergency aid at food banks.