The report, which was released on Sunday morning, has also suggested that the system will be cut down from 75 payments and supplements to just four payment categories, covering a tiered working age payment, family payment, disability payment and the aged pension.

Earlier this year, Mr Andrews tasked former Mission Australia head Patrick McClure with reviewing Australia’s welfare system, which paid out more than $110 billion in 2012-13.

The discussion paper does not include any recommendations, with the McClure team planning to conduct six weeks of public consultations and round tables in capital cities before reporting back to the government later around October this year.

‘‘What I support is a simplified architecture for the system,’’ Mr Andrews said on Sunday, but stressed that the importance of the discussion paper was to ‘‘have a discussion’’.

A key suggestion of the 171-page report is that the Disability Support Pension should only only be people with a permanent impairment and no capacity to work.

It adds that "people with disability who have current or future capacity to work could be assisted through the tiered working age payment to better reflect different work capacities".

Mr Andrews said the government did not yet have a definition of what ‘‘permanent’’ disability would be.

While he said accepted that some people with disability could not work, those with disability were not a homogeneous group. On Sunday, Labor slammed the Disability Support Pension idea.

"I am sick of opening the Sunday paper every week and seeing Mr Andrews demonising disabled people," Shadow Treasurer Chris Bowen told ABC's Insiders program.

"Labor supports measures to help people on the Disability Support Pension back into work where it's possible and appropriate ... What we don't support is cutting people's benefits on disability support in some brutal and blunt effort to force them back into inappropriate jobs."

In the May budget, the government announced plans to increase the age at which people can access the Newstart payment from 22 to 25.

Continuing this theme, the paper says that consideration should also be given to "when young people would access income support in their own right".

The McClure paper also says that the Age Pension could become the primary payment for people of Age Pension age, arguing that ‘‘there is a growing trend for people over the age pension age to receive payments other than [the] Age pension’’.

And it also flags a review of rent assistance and better ‘‘integration’’ of the tax and welfare systems.

In an interview with Channel Ten on Sunday, Mr Andrews further flagged that people on welfare may have their income managed by the government. This could see the expansion of trials that would prohibit young welfare recipients from spending their payments on things such as alcohol.

"There are certain things which you can spend your money and certain things that you can't."

The Social Services Minister also indicated that welfare payments to parents could be tied to ensuring their children attended school.

"Parents should have an obligation to send their kids to school."

Australian Council of Social Service chief executive Cassandra Goldie said she was very concerned that the discussion paper suggested that the income support system could be used for "social engineering".

She said ACOSS did not support using income support to address vulnerabilities in families.

She also called on the government to extend the six week consultation period, arguing that after waiting months for the discussion paper, vulnerable communities needed more time to respond.

As Mr McClure foreshadowed in a speech earlier this month, the review is based around four pillars: a simpler income support system, strengthening individual and family capacity, engaging with employers and building community capability.

With Caroline Zielinksi