Controversial government plans to allow Jobcentre staff to "order" benefit claimants to undergo tests for drug and alcohol dependency are in breach of European law and unlikely to work, according to leading addiction charities.

The proposals, outlined in the welfare reform bill, which is due before the House of Lords next month, are part of a major government drive to reform Britain's benefits culture and save taxpayers hundreds of millions of pounds a year.

The government points to research that suggests that some 100,000 problem drugs users – heroin and crack cocaine addicts – are claiming benefits but are not in treatment, suggesting that it is unlikely they will ever be able to escape their addiction.

But as the bill draws nearer to becoming law, there are growing concerns about the new powers it will devolve to Jobcentre staff. The legislation would allow them to ask benefit claimants searching questions about their drug or alcohol use. Those suspected of having a dependency or of misusing drugs will then be asked to undergo an assessment and, if they refuse, face having their benefits withdrawn for a maximum of 26 weeks.

The bill also gives Jobcentres the power to share and exchange information with the police and probation services. "Staff will be given unprecedented new powers that are intrusive, coercive and will take the benefit system in worrying new directions," said Martin Barnes, chief executive of the charity DrugScope.

If the Jobcentre determines that benefit claimants' dependency is affecting their prospects of obtaining work, they can be required to undergo treatment as part of a "rehabilitation plan". The DWP has denied that this constitutes forcing someone to undergo a particular form of drug treatment. But Barnes said the threat of withdrawing benefits could be interpreted as compelling someone to receive treatment.

"Potentially, anyone could be required to answer questions about their drug or alcohol use as the bill includes no test or threshold which staff must first satisfy," he said. "Do we really want to see Jobcentres given the power to drug test, share information about claimants with the police and, for the first time, require vulnerable people to undergo medical treatment by waving the stick of benefit sanctions?"

Release, a drug addiction charity, said the proposals "fail to understand the nature of problematic drug use" and claimed that requiring benefit claimants to detail their drug use contravened Article 8 of the European Convention of Human Rights – the right to privacy.

While the government intends to pilot the scheme with heroin and crack cocaine users, the bill includes a power for its provisions to be expanded to all drugs, including alcohol.

A DWP spokesman said: "Drug and alcohol addiction destroys lives. We want to make sure people get the help they need to overcome their addictions, so that they can find a job and get their lives back on track. That is why we are proposing measures to tackle addiction as part of the welfare bill. We will ensure that they do sit within the confines of human rights law".