The Federal Government will follow a precedent from New Zealand in a bid to break what it deems the cycle of welfare dependency in Australia.
The Social Services Minister has announced a package of almost $100 million to allow groups to apply for and use the funds to develop programs for getting people off welfare.
A new report by PricewaterhouseCoopers has found young carers, young parents and some students are most at risk of getting caught in a lifetime of welfare.
Social Services Minister Christian Porter has announced a program called the Australian Priority Investment Approach.
He says it is all about intervening early and getting at-risk groups into training or jobs.
Based on the New Zealand model, the states and other involved groups would bid for funds from a pool of $96 million to devise programs to break the cycle of welfare dependency.
Those programs will be monitored, evaluated and discontinued if they fail.
New Zealand has reduced the country's welfare bill by billions of dollars in using a similar model.
New Zealand's State Services Minister Paula Bennett has told the ABC that, in New Zealand, unless obligations like health checks and school attendance for children are met, benefits are cut by up to half.
"We've seen decades of throwing money at a problem and it not changing. But I instinctively knew that, if we backed people earlier and actually spent a bit more money on them then, we could make a difference, by a combination of, really, a bit of carrot and a bit of stick as well. So you have higher expectations of those that are on welfare, but then you equally make sure that you're then backing them up with the right kind of opportunities, training and more intensive case management."
The report into the impact of long-term welfare reliance shows thousands of young parents will remain on benefits for long periods of time because they will have more children.
It estimates that will cost taxpayers around $2.4 billion.
The report shows almost 30 per cent of students who have received study payments will draw on the system at some point over the next 60 years.
And it says half of the 11,000 young carers on welfare are predicted to remain on benefits over the next 70 years, costing $5.2 billion.
Mr Porter says that shows a revolution is needed in the way social-security payments are approached.
"The true purpose of welfare is not to achieve these ideological targets around inequality or the size of government. The real task is to continuously engage in an honest, evidence-based assessment as to when an existing welfare-spending approach improves an individual's prospect for a better life, a life made more meaningful by employment, by community contribution and through self-reliance, and measure when it does not."
Mr Porter says there is nothing progressive about parts of a system which fail to place a fair and firm obligation on capable people to assume increasing responsibility for their own lives.
He says, wherever possible, welfare should be a helping hand to get out of the system, not help that means people stay in the system for life.
"Where we find groups who have long cycles of dependence on welfare, to decrease that dependence and to move people into states of self-reliance. Our targets will be measured on how more self-reliant members of these targeted groups become. Now, of course, in the long run, if you can create greater self-reliance, I mean, in the very long run, there's likely to be coincidental and parallel improvements to the sustainability of welfare budgets. But we're not setting targets in that respect."
Opposition Leader Bill Shorten says anything that will help make people less reliant on welfare is a good thing.
But he says the Government is not really committed to improving things for those in need.
"We always believe in long-term investments in welfare. But I think, if the Government really believes in the welfare for individuals and getting people out of the cycle of poverty, they shouldn't gut Medicare, they should properly fund our schools, they should properly fund child care. And while they're at it, they should spend less time investing in the long-term welfare of our big banks and foreign multinationals and more time in looking after pensioners and people who are looking desperately for a job."
Mr Porter says Australia spends around $160 billion a year on welfare and that represents 80 per cent of all individual income tax raised in Australia.
He says, without further restraint, the welfare bill by 2026 would expand to $277 billion a year.
Mr Porters says that means an estimated lifetime welfare cost to the present Australian population of $4.8 trillion.
