Employers will be encouraged with a $10,000 payment to hire older Australians under the coalition's $524.8 million Restart program.
Jobseekers under 30 on Youth Allowance or Newstart will be forced to work for the dole.
The government says the Restart plan could help 32,000 job seekers over 50 each year, through a series of payments to employers who hire them for two years.
Under the scheme employers will receive $3000 for first six months and a further $3000 for the full year.
They'll get another $2000 if the worker is still employed after 18 months and a final $2000 after two years.
By introducing the payment the government hopes employers will give older workers a go.
"There needs to be a change in the culture of many businesses towards older workers," Treasurer Joe Hockey said on Tuesday.
The tough new work-for-the dole measures will encourage those between the ages of 18 and 30 to "earn or learn", or be forced to work 25 hours a week to receive their benefits
Those wanting government assistance will be forced to sit through a six month waiting period before qualifying for support, and being forced onto the coalition's six months work for the dole program.
If they fail to find work they face another six months without benefits, before repeating the half-year work for the dole program.
Under the welfare crackdown - which will begin in full from July next year - the cycle will continue until their 30th birthday unless a jobseeker finds work.
"We sell our young people short if we allow them to drift into welfare dependency," Employment Minister Eric Abetz said.
Under 25s will also be ineligible for Newstart payments, but only the lower paying Youth Allowance benefit.
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