Regrettably, governments intent on instituting sensible reforms to streamline the welfare system and ensure it delivers better value for money have frequently been cowed by the entrenched nature of the system and by scare campaigns mounted by political opponents. The release of a new report from the Reference Group on Welfare Reform, (commissioned by former social services minister Kevin Andrews in December 2013) offers a practicable way forward, however.

The motives of governments intent on welfare reform are frequently viewed with suspicion, perhaps with good reason given their latter-day zealousness for cutting public expenditure. To allay such concerns, the Coalition appointed former Mission Australia chief executive Patrick McClure, a person highly regarded in the charity and welfare sector, as the chairman of its reference group. And wisely, the report makes clear that no current individual should have their welfare payment reduced in the transition to a new system. Indeed, it says that many will be better off, though that assertion may be treated with scepticism.

Such a claim rests squarely on the notion that a job, whether full time, part time or even casual, confers greater financial (and psychic) benefits on an individual than does long-term receipt of an allowance or a support pension. To that end, the review has recommended an increase in the number and range of incentives for people to move into the workforce and greater support for people who may have moved out of welfare into work but are forced back, as a result of having their hours reduced.

Allowing people to retain eligibility for concession cards for a period after they have returned to work or increased their hours is but one of a series of measures intended to streamline the entire bureaucracy of welfare provision. The report envisions just five primary allowances: employment benefits (to be paid at three different levels depending on capacity to work), a carer payment, the age pension, a means-tested payment for parents and guardians of children under the age of 22, and a supported living pension (replacing the disability support pension).

In accord with the Coalition's desire to reduce the rapid growth in the number of Australians on disability support, the McClure report has recommended that eligibility for the supported living pension be significantly tightened. This is a sensible, if overdue measure given people now assessed as being psychiatrically unfit for work may continue to receive welfare almost indefinitely. Equally prudent is the recommendation that the Commonwealth look to reduce its future welfare bill by assessing those most likely to seek shelter under the welfare umbrella and investing appropriately in order to build their capacity to remain independent. This model has already been rolled out in New Zealand, with a recent review suggesting it has substantially reduced the country's lifetime income support.

The recommendation that employers and employment services be extended more support to ensure more sustained employment outcomes is reasonable too, but it is one that needs careful oversight. As the ABC revealed this week, the rorting of welfare-to-work programs (and the fudging of employment numbers) is now widespread. Alarmingly, governments continue to deny a problem exists – a fact which renders somewhat dubious their declarations about the importance of increased workforce participation.

Having been handed a compelling model for welfare reform, it is disappointing that Social Services Minister Scott Morrison should now be suggesting there will be no major overhaul until at least 2015-16. That reflects to some extent the Abbott government's depleted political capital. Nevertheless, this is one report Mr Morrison would do well to keep uppermost on his desk.