The UK does have a real problem of more and more people choosing for whatever reason not to work - which is almost certainly one factor contributing to the cost of living crisis.
Perhaps I might offer an illustrative example of how it works in reality should someone which to "choose" not to work due to ill-health?
Let's keep it simple for sake of argument. A single person, living alone, in a private rented house for instance. Lets say they were working but due to some sort of illness, could be a physical health condition or maybe a mental health condition (or a mixture) they've not been able to cope with carrying on at their current employer (who was very sympathetic and tried to help keep them in work) and after a spell of being on sick pay have resigned as it just doesn't look like they're going back to work anytime soon.
They've been to their GP who has been issuing them regular fit notes every month so the GP is aware and treatment is being explored but it will be some time until they're able to access effective treatments. In the meantime all that can be done is attempting to manage whatever the issue is with medication which has helped take the edge of but they're still not well.
They apply for Universal Credit (UC) as they're now unemployed. The online application is fairly straightforward (for those who have a modicum of IT literacy) and they have their appointment with a work coach at the Jobcentre a few days later. They tell the work coach about their health difficulties and the work coach will give them a "to do" to upload their fit note onto their UC claim to begin their referral for a Work Capability Assessment (WCA).
At this point, whilst waiting for the WCA process to grind forward, it can go one of two ways. If they get an understanding work coach an honest conversation will follow and the work coach will ask them to agree to a claimant commitment which is properly tailored around their current inability to work, perhaps they'll need to update their CV, do a few courses, and have regular contact with their work coach. If they get a less understanding work coach then their claimant commitment will be far more intense up to and including actively seeking work (though most appear to accept a fit note as a reason to tone down the work search requirements).
After all that's sorted you'll start getting payments from Universal Credit. The first payment will be about five weeks after you applies and for a single adult aged 25 or over is currently £393.45 per month (if you're under-25 it's £311.68) and you'll also get help with your rent. Assuming your aged 35 or over you'll get the one bedroom rate of Local Housing Allowance (as you're in private rented accommodation). This varies nationally but lets pick a reasonably sized city like Nottingham. If you live in Nottingham in which case you'll get up to £548.51 per month towards your rent. If you're under-35 you'll only get the Shared Accommodation Rate (as single people aged under-35 are expected to live together presumably) which for Nottingham is £378.85 per month. You'll also get some help with your Council Tax by applying for a reduction from the relevant local council.
So you've gone from working down to £393.45 per month to live on (food, gas, electric, water, clothes, etc etc) and £548.51 per month to pay your rent. Not sure I'd give up work lightly for just that.
Anyway, so you've started your WCA process so around a month after the fit note goes in you'll then be a sent a UC50 form to fill in which is your opportunity to tell the Department for Work and Pensions all about your health conditions and how them effect you day to day. It's 24 pages long and starts with basic information about you (who you are, who your GP is, any other medical professional involved in your care, information about your health conditions, etc) before asking you specific questions about various activities related to work such as your ability to mobilise, to pick up and move things, controlling your bladder and bowels, starting and finishing tasks, coping with social situations, etc. You can see the form
here for interest.
Once you've managed to fill all that in providing as much information as possible you'll then, almost certainly, be referred for an assessment with a health care professional (often a nurse, rarely a doctor, sometimes a physiotherapist or even a paramedic) provided by a DWP contractor. This may be face to face, via telephone or video link. You'll be asked more questions about your health conditions, how they effect you, any treatments, medications and their effects, your typical day, how you can manage the activities considered by the WCA, problems you have doing them and how you manage now, as well as being given some simple tasks to do like bending, reaching and gripping. The assessment will probably take around an hour. Maybe a little less, maybe a little more.
The assessor will then prepare a report as to whether or not you are fit for work, have limited capability for work, or have limited capability for work and work-related activity. That report is forwarded onto the DWP for a final decision to be made (though usually they rubber stamp the assessors opinion) as to your capability for work.
If you're fit for work in the view of the DWP then your GPs fit notes are irrelevant you're fit for work and will be expected to actively seek work by applying for jobs, being available for interview, and so on. If you have limited capability for work you won't need to apply for jobs but you will still be expected to undertake steps towards being ready to get work. Preparing CVs, doing courses, regular contact with your work coach, etc. If you have limited capability for work and work related activity then you can opt into engaging with the Jobcentre and will have an assigned work coach but in general terms will simply be left alone with perhaps the odd phone call once or twice a year to check-in and see how you are. You will also, if you're in this latter group, get an extra £416.19 per month in your award.
And that's, in a nutshell, the whole process. It isn't as easy as just getting a fit note and that's the end of the story. It's an already very involved process which requires the completion of a pretty lengthy, detailed and to be honest quite invasive form. This is followed by a detailed assessment with a health care professional taking around an hour (along with consideration time after you've left) and finally a DWP decision makers reviews everything and makes a decision on your capability for work.
Of course whilst all this is going on you're still unwell and waiting for treatment on the NHS which continues to be delayed due to the existing issues with the health service. No doubt feeling worse and worse as bills continue to mount, as limited savings (because if they weren't limited you wouldn't get UC anyway or would get a reduced rate) are eaten away and now the DWP are asking you to fill in forms in which you have to talk about all the things you cannot do anymore and then go to an assessment with a stranger to tell them about all the problems you have. This doesn't feel conducive to the main thing you want to do which is get better so you can get back to work but this is what you need to do right now to make sure you keep the money you need to live on.
I hope that might be helpful for some to put into context what the system already requires someone to do before they can be "signed off" as a disabled and not required to actively seek work whilst claiming Universal Credit.