As is so often the case, an excellent idea, poorly executed. You know there will be incidences of severely disabled people being told they could still work, it's just what happens when you try to bureaucratise the process.
Firstly, we have a host of doctors who can't get work when then qualify, since they'd be working for the NHS anyway, let DWP employ them as GP's to assess people's ability to work. Sure we'll need more to start with then we will when everyone has been assessed, but in the meantime it gives them the chance to find alternative employment.
Secondly, assessments need to be medical only, to see what kind of work a person can do, it's doesn't need to be as specific as PSR suggests, it can be general, manual or office work. If a dr assessed someone as unable to work, they must also state what adjustments an employer will need to make to allow this person to work if that person says they want to work anyway.
Finally, IB should be paid in two tiers, one to the permanently unable to work, and a lower level for those temporarily unable to work.
As for a work life balance, I don't know what job you do PSR, but most employers consider a good work life balance is that they give you weekends off (unless you have a Blackberry of course!), the rest of the time you belong to them! If we're going to have that debate, lets not centralise it on IB claimants, lets have the general debate.