If implemented, the move would see many benefits frozen for two years, then rising only in line with average pay.
In recent years inflation has risen at a far higher rate than average earnings - Whitehall officials say a switch since 2008/9 would have saved £14bn.
The government needs to find £10bn of extra savings in the welfare budget.
Sources stressed the detail of how to make these cuts had not yet been discussed. They would not be drawn on which policies were being looked at. Click here for more.
