Last year Lib Dems achieved a huge victory in stopping George Osborne's tax credit cuts to low-income working families.
Leader Tim Farron has called on Labour and Tory rebels to support an amendment in the Lords that would block the changes before they come into force in April.
"The first big political battle of 2016 is already looming. The Liberal Democrats worked hard to stop tax credit cuts and we won't let the Government bring it in through the back door.
"The Prime Minister and Chancellor claim they want to make work pay, but cuts to universal credit will mean people pocket less of what they earn.
£1,000 worse off
After Liberal lords forced the Chancellor to back down, he quietly kept plans to impose similar cuts to Universal Credit. Working families stand to lose more than £1,000 a year.
The package would have an almost identical impact to the tax credit reforms.
According to the Social Mobility and Child Poverty Commission, the Government's own advisory body, "there is a risk that incentives to progress in work for many families could end up being worse than they were…The immediate priority must be…reversing the" planned "cuts to work allowances…before they are implemented".
The Liberal Democrats are set to table an amendment in the House of Lords to the Government's Welfare Reform and Work Bill to repeal the regulations bringing in the change, which would likely see a vote before the end of January.
Read more on the Liberal Democrats website.