Social Services Minister Scott Morrison says wholesale changes to the welfare system are "necessary", but he has signalled they will be introduced slowly and in stages.

A wide-ranging review commissioned by the Government has called for a simplified payment system and tighter eligibility conditions for disability support payments.

Mr Morrison said the proposals could be implemented in the medium to long-term.

"They do point a way forward, I believe, for the next generation of necessary change in this area," he said at the National Press Club (NPC).

"The changes proposed and the way to achieve them are not revolutionary but medium to long-term change that can be achieved incrementally."

However, he acknowledged the Government would be battling a widespread lack of "appetite for change" and called for an "upgrade" in the political debate about levels of welfare support.

"My concern is that right now there seems to be no appetite for the change that is necessary," he said.

"Whether that's in the community, the parliament, the Opposition, some members of the cross bench even.

"But unless this does change, unless we are able to move to a better system that better reflects the needs of the next generation and even this one, then change - even incremental change - will not be possible.

"We don't have to make this change overnight. Right now we can still manage and define the pace of change but only if we commit to it now."

The proposed new payment structure. ( Department of Social Services )

The Opposition said it will look at the report, however Labor leader Bill Shorten emphasised the importance of Australia's welfare safety net in protecting the poor.

"When we have a debate about future of welfare it's important we don't get into a 'blame the victim' [debate]," he said.

"That doesn't mean changes shouldn't be made, that doesn't mean improvements shouldn't be made, of course, we always need to be making sure it's sustainable."

The report lays out a plan to cut the number of welfare payments currently offered from 75 to five, but Mr Morrison would not outline which specific changes the Government wanted to adopt.

"My purpose is to set out where I think the context is for framing not just this budget but frankly the next 10 when it comes from welfare," he said.

The Coalition commissioned the review in December 2013 and asked lead author Patrick McClure, a former head of Mission Australia, to find ways to save money and encourage more people to return to work.

His report called for simplification of the 20 income support payments and 55 supplementary payments, but said no-one should receive less money than they do now.

In his NPC speech, Mr Morrison outlined that welfare spending is due to grow by $11.7 billion over the four years of the forward estimates.

Of the $150 billion budget, the aged pension is the biggest slice, followed by family tax benefits.

'We're trying to design a new system'

The McClure review recommended replacing the current system of 20 income support payments and 55 supplementary payments with five new categories:

The age pension;

The age pension; A carers payment;

A carers payment; A child and youth payment;

A child and youth payment; A tiered working age payment, which would include Newstart;

A tiered working age payment, which would include Newstart; A supported living pension, which would include disability support.

It recommended three different tiers - a base or foundation payment, a middle tier for parents with dependent children and those with a disability who can work between 15 and 29 hours per week, and then an upper tier for those who can only work eight to 14 hours.

"The current system is complex and inefficient. It's very difficult to understand and navigate for people on income support and, in addition, there are a lot of disincentives to work and it doesn't really meet the needs of a changing labour market," Mr McClure told The World Today.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 55 seconds 4 m 55 s McClure review recommends major overhaul of welfare to encourage work ( Naomi Woodley ) Download 9 MB

"People who are currently in the system on income support won't get a reduction in payments, so those people will remain as is. What we're trying to do is design a new system."

The report does not go to precisely how much each payment should be worth. Community, welfare and business groups have long argued that the current level of Newstart is too low.

"It would be extremely difficult to live on that level of payment, there's no doubt about it, but in what we're proposing, many people will be better off than in the current system," Mr McClure said.