The subject of welfare reform is close to the heart of Prime Minister Tony Abbott. In his 2009 book, Battlelines, Mr Abbott wrote that one of the Howard government's most significant achievements was "slowing the rise in the number of people claiming the disability pension". Social Services Minister Kevin Andrews has flagged an overhaul of the welfare system saying it was unsustainable. Credit:Jeffrey Chan But the Prime Minister is keenly aware of the dangerous politics surrounding any changes to welfare payments. Mr Andrews chose his words carefully in his interview on ABC radio on Tuesday. Mr Andrews said that the welfare changes would not happen "in the immediate future" but rather in the "medium to long term".

Australia needed to avoid becoming a welfare state like "nations in Europe", Mr Andrews said. "People who need welfare, who deserve welfare, will get welfare," he added. Mr Andrews cited the "incentives" being offered by the Abbott government to encourage welfare recipients "who are capable of working" to get jobs. Welfare recipients aged under 30 who move from cities to regional towns for work can apply for government "incentives" of $2500, provided they keep the job for 12 months. If they stay in the job for two years they can apply for another $4000, Mr Andrews said. Employers who hire someone aged over 50 who has been on benefits for six months or longer, can apply for payments of $3250.

One of the big problems with the current welfare system, Mr Andrews said, is that payments such as Newstart are indexed at different rates to the pensions, such as the disability support pension (DSP). "That creates in some circumstances a perverse incentive for people to get onto the DSP," Mr Andrews said. The Social Services Minister said previous governments had regarded the disability pension as "set-and-forget payments", and this needed to change, he indicated. The former chief executive of Mission Australia, Patrick McClure, has been appointed to lead Mr Andrews' review of Australia's welfare system and he is expected to report back in February. Parenting payments and the disability support pension were two areas of welfare that "would be sensible to review again", Mr Andrews told the ABC.

Opposition Leader Bill Shorten urged the Prime Minister to rule out any changes to the old age pension, including slowing the rate of its growth. Mr Shorten said if Mr Abbott was serious about reducing welfare he should ''get rid of the multi-millionaires' welfare''. ''Get rid of this gold-plated paid parental scheme,'' Mr Shorten said. ''If they want to tackle the real problems, don't start at the bottom of the heap,'' he added. ''Don't start at the people who haven't got a voice ... Don't pick on the people who can't fight back.'' Mr Andrews, in his interview with The Australian, ruled out any changes to the old age pension.

Cassandra Goldie, chief executive of the Australian Council of Social Service, admitted the welfare system, like any government program, had a "small, small, proportion of people who don't do the right thing". Dr Goldie told ABC 774 she agreed with Mr Andrews that given Australia's low tax rates, coupled with an ageing population, future governments will not be able to sustain the current level of welfare spending. But Dr Goldie rejected the idea that the disability support pension was an easy "rort" to sign up to. She said the previous Labor government had made it even more difficult for people to get disability pensions, and as a result more people were going on the Newstart unemployment payment of $36 a day. "The disability support pension is now extremely hard to get on to," she said. "It's confined to people who are subject to rigorous testing." Over the past few weeks, Mr Andrews has used announcements in The Australian newspaper to warn the public of his plans to crack down on welfare payments.

In Tuesday's report, Mr Andrews flagged the idea of preventing welfare recipients from refusing to take a job on the grounds that it was more than an 90 minutes travel from their home. "We want to encourage people to take a job even if there are circumstances where that job might be further away," Mr Andrews said. In a story last week, Mr Andrews said it was his "inclination" to consider splitting the Newstart unemployment benefit into different "tiers", which could apply to the payment rate or the conditions attached to receiving it. Loading Mr Andrews has also suggested merging the departments of Social Services and Human Services, to save money.