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In his wide-ranging speech, Mr Duncan Smith also criticised the old Employment Support Allowance benefit for signing people off work when they were judged by doctors as too sick to work.
“The ESA has Labour’s essential mistake at its heart – that people are passive victims. Of course if you treat people as passive that’s what they’ll become,” he said.
The disability charity Scope said it agreed that disabled people needed better help to get into work, but warned that cutting financial support would actually undermine this goal.
“The Secretary of State is right to say that many disabled people can, and want to, work. If we are going to halve the disability employment gap, we need to remove the barriers disabled people still face when finding, staying in and progressing in work," said Mark Atkinson, the organisation's interim chief executive.
“However, we are deeply concerned that lowering the financial support unemployed disabled people receive, will push people further from the workplace. Those in the Work Related Activity Group who receive Employment Support Allowance are disabled people who’ve been independently assessed as being unfit for work. It is not a passive benefit. Everyone in the Group must take steps towards finding work."
The PCS trade union, which represents civil servants, said Mr Duncan Smith had “fundamentally failed in his job”, however.
“How Iain Duncan Smith, who was fundamentally failed in his job, has remained in his post is a political mystery that will confound pundits for generations to come,” the union’s general sectetary Mark Serwotka said.
“Universal credit has been a textbook case of how not to overhaul public services and his cruel cuts to social security support for unemployed, sick and disabled people bring shame on the UK as a civilised nation."
The Work and Pensions Secretary’s policies on disability have faced sustained criticism in recent years.
It was announced in August that the United Nations is investigating the British Government over alleged human rights abuses by his department and programme.
He has also been lambasted for closing Remploy factories, the scrapping of the Independent Living Fund, cuts to payments for a disability Access To Work scheme and cuts to Employment and Support Allowance.
Fitness to work tests have also been the subject of much disquiet, with critics labeling them unfair, arbitrary, and bureaucratic.