YOUNG people who stay unemployed when jobs are available should be denied the dole, Opposition Leader Tony Abbott today argues in a major policy outline.

The long-term unemployed should have their $244 weekly unemployment benefits quarantined to ensure it was spent on essentials as part of a national program.



Mr Abbott today said most people on the dole spend 90 to 100 per cent of their benefits on essentials, but "occasionally people aren't fair dinkum, can't manage their income".



An Abbott government also would push more people with lower-level disabilities into jobs and make it compulsory for the under-50 unemployed under tightened welfare laws.



Prime Minister Julia Gillard dismissed the welfare reforms, saying it was the third time in a year the opposition leader had announced his plan.



"These are recycled plans, in fact twice reheated," she told reporters in Perth today.



Ms Gillard said Mr Abbott was feeling some political heat from Liberal Party focus groups.



"People are worried about that he's negative all the time," she said, adding that Mr Abbott's announcement was "all about politics".



"This is the third time he's announced it and this time he hasn't even bothered to try and talk about where the money would come from."



Mr Abbott today insisted his proposals were not "a radical right wing solution" but made it clear he wanted to put pressure on the Prime Minister to move further to the right than she might want.



The Government will use the May Budget to introduce its own welfare-to-work programs and Mr Abbott is getting in first to establish a policy contrast, and to push the Government towards tougher restrictions.



"The government vowed to retain Work for the Dole at the 2007 election but has since deliberately allowed it to decay," said Mr Abbott in a speech prepared for today.



"Since its introduction in 1997, more than 600,000 people have participated in Work for the Dole gaining the discipline and dignity of performing useful work while developing the life skills so critical to obtaining and keeping a real job.



"Since 2007, Work for the Dole participation has fallen by 60 per cent to less than 10,000.



"Work for the Dole should be the default option for everyone under 50 who has been on unemployment benefits for more than six months. Reasonably fit working age people should be working, preferably for a wage but if not, for the dole."



He says the quarantining of welfare income was a justified interference in people’s lives because taxpayers had a right to insist that their money was not wasted.



"I originally proposed this while Shadow Minister for Family and Community Services in May 2008," said Mr Abbott.



"Last year, as part of normalizing the intervention, the government introduced automatic welfare quarantine for all long-term unemployment beneficiaries in the Northern Territory.



"This is right in the Territory so can hardly be wrong elsewhere.



"Ensuring that at least 50 per cent of welfare income is spent on the necessities of life should be a help rather than a hindrance for unemployed people. It would also have the advantage of discouraging people who might be 'working the system'."



Mr Abbott says the hung Parliament of Britain had not stopped the UK Government from reforming the disability pension with a more targeted payment for people whose disabilities might not be permanent.



"Australian disability pension numbers are set to pass 800,000 this year at an annual cost of $13 billion," he says.



"That’s about 220,000 more working age people on the disability pension than on unemployment benefits. With just over one per cent of disability pensioners moving back into the workforce every year and with nearly 60 per cent of recipients having potentially treatable mental health or muscular-skeletal conditions, a reform of this type should be considered here.



"What’s needed is a more sophisticated benefit structure that distinguishes between disabilities that are likely to be lasting and those that could be temporary and that provides more encouragement for people with some capacity for work.



"Better directing disability payments could help to part-fund much greater assistance to people with very serious disabilities as proposed in the Productivity Commission’s recent draft report into disability care."