A novel coupled-mode model is developed for the wave-current-seabed interaction problem, with application in wave scattering by non-homogeneous, sheared currents over general bottom topography. The formulation is based on a velocity representation defined by a series of local vertical modes containing the propagating and evanescent modes, able to accurately treat the continuity condition and the bottom boundary condition on sloping parts of the seabed. Using the above representation in Euler equations, a coupled system of differential equations on the horizontal plane is derived, with respect to the unknown horizontal velocity modal amplitudes. In the case of small-amplitude waves, a linearized version of the above coupled-mode system is obtained, and the dispersion characteristics are studied for various interesting cases of wave-seabed-current interaction. Keeping only the propagating mode in the vertical expansion of the wave potential, the present system is reduced to a one-equation, non-linear model, generalizing Boussinesq models. The analytical structure of the present coupled-mode system facilitates extensions to treat non-linear effects and further applications concerning wave scattering by inhomogeneous currents in coastal regions with general 3D bottom topography.