This article studies the formation and regulation of individual identities among a group of people who after long periods of unemployment are put in a specialized work program for so called ‘occupationally disabled’ individuals. In contrast to its official aim to activate and rehabilitate participants back to the labour market, the study suggests that the work program constitutes the participants as passive and unable to meet the criteria of employability on the labour market. The term ‘occupationally disabled’ emerges not as a medical label referring to already existing, inner characteristic of the individuals concerned, but as an identity that they take on as they pass through the work program. The article contributes to existing research of the formation and regulation of individual identities in organizations in two regards: first, by showing how medicine participates in the formation and regulation of individual identities in organizations, and second, by relating the formation and regulation of individual identities to broader societal issues concerning neoliberal government. Our study suggests that there is a tendency in neo-liberal societies to combine medical and economic expertise into a ‘medico-economic discourse’ within which issues concerning individuals’ activity and agency are transformed into matters of illness and disability. That is, whereas active and self-governing individuals are governed as parts of a high-performing segment of the working population, our study suggests that passive and dependent individuals tend to be governed not just as parts of a low performing segment of the working population, but also as a disabled segment.