If any reminder were needed of how arbitrary, cruel and ultimately self-defeating the government's attempts to reform disability benefits are likely to be, it is the case of Sue Marsh.

At the weekend, Marsh - who has severe Crohn's disease - received a letter confirming she was no longer eligible for Disability Living Allowance (DLA), a payment which enables her to meet the considerable costs of care and of getting around.

In a blog post describing her shock and disbelief at the decision she writes:

"I have severe Crohn's disease. Probably one of the most severe cases in the country.
I have had 7 major life saving operations to remove over 30 obstructions (blockages) from my bowel.
I take chemo-shots every two weeks that suppress my immune system, ensuring that I regularly have to fight infections. Exhaustion, pain and nausea plague every single day of my life.
I have osteoprosis and malnutrition.
I have had major seizures and a stroke.
Nonetheless, I have just heard from my own Disability Living Allowance application, that it has been rejected. Completely. I will receive no support at all from DLA. Despite claiming successfully in the past, despite only getting weaker and more frail and less able to live independently, my reconsideration was rejected.
The only option now is to appeal. I will have to fill in a horribly complicated appeal form over the Xmas period, wait up to one year to go to tribunal, and probably go bankrupt in the mean time.
The state will pay thousands to hear my appeal.
The only conclusion I can come to is that if I don't qualify for DLA, no-one with bowel disease can."

In the past Marsh has been fastidious in her claims for DLA: when she is feeling well enough she comes off DLA; when her condition (which fluctuates in severity) gets worse gain, she reapplies. Applying for DLA is not lightly undertaken - it requires filling out a 50 page form and accompanying it with a stack of medical evidence, such as doctor's letters. Ironically, had Sue not been so diligent - if she had just stayed permanently on DLA regardless of the changes in her condition - she would not be in the position she is now, facing the removal of £280 a month of allowances.

Her initial thought, after her latest application was rejected, was that an administrative error had been made. She sent it back to the Department for Work and Pensions (DWP) for "reconsideration". The answer came back last Saturday: the decision stands.

Marsh says that despite the shock she couldn't help but see the rather grimly ironical funny side. She is one of the most articulate campaigners against the unfairness and irrationality of the government's proposed welfare reforms. She runs, or writes for, three blogs - Where's the Benefit, Diary of a Benefit Scrounger, and The Broken of Britain. She is a regular contributor to the Guardian's Comment is Free section. The despair of losing DLA (and the long wait for an appeal) notwithstanding, it was hard for her not to see this as a campaigner's gift and a huge PR own-goal for the DWP. Indeed, over the weekend, her blog post went viral on Twitter, provoking a storm of outrage.

It has also highlighted changes to DLA proposed as part of the Welfare Reform Bill, currently in the House of Lords (and being debated in the New Year). The government is proposing to replace DLA with a Personal Independence Payment (PIP). This will focus welfare payments on disabled claimants deemed to be "most in need" in an attempt to reduce government expenditure on this benefit by around 20% by 2015-16. The danger, says campaigners, is that reform is being driven by the need to meet cost targets, meaning that medical assessments will become increasingly arbitrary and - as Marsh discovered this weekend - incomprehensible, leading to huge numbers of appeals, and widespread fury.

Up to now, the debate over disability benefits - at least in the mainstream media - has focused almost exclusively on unemployment benefits: whether or not people "on the sick" should be pressed harder to come off benefit and work. The "uncovering" of apparently "fit for work" claimants - so-called "benefit scroungers" - is a staple right wing tabloid story and has helped shape the political debate over welfare into one about "deserving" and "undeserving" beneficiaries.

Crucially, DLA is not employment-related, and many people who get it work (indeed, it helps many of them to remain in work): you can qualify for it if you are under the age of 65, have a physical or mental disability, and your disability is severe enough for you to need assistance with care and mobility. The level of payment is pegged to the severity of your condition. In short, DLA is a targeted, flexible payment you can receive if you have a severe disability.

The divisive "feckless benefit scrounger" rhetoric so brutally encouraged by ministers and the DWP to promote reform of incapacity benefit will not be quite so easy to spin this time round. Marsh says that DLA is not only hard to get, but has one of the lowest fraud rates of any benefit - at less than 0.5%. It can also be claimed, says Marsh, on behalf of disabled children.

Importantly, the reform of DLA will affect a good percentage of Daily Mail readers and "middle England" Tory voters, many of whom would be most surprised and offended to be labelled as scroungers (or see their children so labelled). Around 3.2m people are in receipt of DLA. Chopping 20% off this bill will mean widespread incredulity, anger and despair for recipients and a huge political problem for the Coalition. As Marsh points out on her blog:

"Here are some figures that may explain why "so many" qualify for DLA: 3.7 million people have lung disease, 2.6 million people have diabetes, 180,000 people suffer from bowel disease, 5.4 million people suffer from asthma, 2.6 million live with heart disease, around 300,000 people a year are diagnosed with cancer, 1,800 babies a year are born with cerebral palsy, 640,000 people live with schizophrenia, 820,000 live with Alzheimers or dementia, 19,000 receive dialysis for kidney failure, 23,000 are deaf blind, around 40,000 people have suffered a spinal injury and 8,500 people suffer from cystic fibrosis."

This is a large, powerful, and articulate lobby. Reforming incapacity benefit has been a relatively easy ride for ministers. PIP looks like a disaster in waiting.