Unions have reacted angrily to government plans which would see low-paid workers having their benefit payments stopped if they go on strike.

Employees eligible for working tax credits because they earn under £13,000 will no longer receive extra cash if their salary falls because they take industrial action.

Bosses will be given a code to alert the authorities if a drop in wages has been caused as a result of a walkout when all welfare payments are brought under the new universal credit system next year.

At the moment workers can go on strike for up to ten days a year without their tax credits being affected, but Iain Duncan Smith, the work and pensions secretary, believes the current rules are out of date and unfair.

"It is totally wrong that the current benefit system compensates workers and tops up their income when they go on strike," he said. "This is unfair to taxpayers and creates perverse incentives.

"Striking is a choice, and in future benefit claimants will have to pay the price for that choice, as under universal credit, we no longer will."

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The Department for Work and Pensions said nearly 1.4m days were lost to strike action last year.

TUC leader Brendan Barber told The Guardian: "This is petty and vindictive. Workers are always reluctant to strike, depriving their families of benefits will leave low-paid workers even more vulnerable to bad treatment."