Atos is set to abandon its contract to deliver for work capability assesments a year earlier than planned. The company's £500m contract was set to end in August 2015.
A new company will be appointed in the early part of 2015, while Atos will "not receive a single penny of compensation,"according to the disabilities minister Mike Penning.
However, Atos healthcare will continue to provide the personel independence payment assesments in Scotland as well as in the north and south of England.
The minister added that Atos had made a "substantial financial settlement" to the Department for Work and Pensions (DWP)
Today we are announcing we are seeking a new provider to replace Atos for the Work Capability Assessment
— DWP Press Office (@dwppressoffice) March 27, 2014
Disability campaigners had labelled the tests "ridiculously harsh and unfair."The government has said that 158,000 of assements incorrectly classified people fit to work.