The system that will replace incapacity benefits should be more considerate to people with mental illnesses, Work and Pensions Secretary John Hutton says.
John Hutton is expected to unveil the Bill on Tuesday
His Welfare Reform Bill, published later this week, replaces benefits with an employment support allowance.
But disability rights' groups fear a taskforce will not have enough time to deliver a new test for the allowance.
The proportion of people claiming such benefits due to mental illness has risen from 16% in 1988 to almost 40%.
Around 2.7 million people currently claim incapacity benefits. But the government is trying to get a million disabled people off benefits and into jobs, saying it will save £7bn a year.
Under the plans more severely disabled people would receive a higher rate of benefit and have no obligation to look for work.
But it would be compulsory for claimants assessed as able to work to take part in schemes designed to help them back into jobs, including counselling, training and advice.
Those who refused to take part in back-to-work schemes would risk losing part of their benefits.
BBC social affairs correspondent Kim Catcheside says that the current system for assessing entitlement is failing people with mental illness - who are much more likely than people with other disabilities to be wrongly denied benefits.
Mental health charities fear that the new employment support allowance will put mentally-ill people at an even greater disadvantage - because there will be financial penalties for people who refuse to take part in activities to get them back to work.
Mr Hutton has asked a taskforce, which includes charities, to work over the summer to come up with a new test that will be better at recognising people with conditions like depression.
But disability rights' organisations are concerned the Bill will be given its first reading before these crucial decisions have been made.
They also want the government to do more to challenge prejudice about mental illness among employers.
The Commons work and pensions select committee warned in May that it was concerned the shake-up of benefits payments could create a two-tier system.
However, the Department for Work and Pensions responded that the reform was vital.
A DWP spokeswoman said: "It is vital that we continue to build on our reforms and ensure we have a welfare state fit for the 21st Century."
She said the Welfare Reform Bill would be "key" to achieving that.