The shifting make-up of Australia will require a major reform of the nation's welfare system, a landmark report has warned.
The Australian Health and Welfare Institute's 2019 released on Wednesday shows how Australia's welfare system has transformed over the past two decades, shaped by demographic, social and economic changes.
Australia was the sixth lowest spender on social security benefits as a percentage of GDP of the 35 OECD countries, spending 9 per cent compared to an average of 11 per cent.
Fewer Australians are receiving welfare than 20 years ago - but those who are have stayed on it for longer.
It also shows Australia's average employment to population ratio hits a record high.
In 2018, 73.8 per cent of people aged 15-64 were employed, above the OECD average.
If the proportion of the Australian population on income support stayed at 1999 levels, there would have been around 1.1 million extra people aged 18 to 64 receiving payments in 2018.
There's also been a sharp dive in the number of people receiving income support payments, after with major reforms of the social security system.
This included raising the pension age, and parental payments criteria, and activity testing for jobseekers.
In 1999, there were 2.6 million Australians receiving income support - or about 22 per cent of people aged 18 to 64.
In 2018, that fell to 2.3 million - despite the overall population growing from 18.8 million to 25 million - or about 15 per cent of people in the 18 to 64 bracket.
The number of older Australians receiving income support more than halved between 1999 and 2018, due in part to women in the 60-64 age bracket no longer qualifying for the pension.
The number of people on unemployment benefits has also declined since 1999 - from 6.1 per cent to a low of 3.4 per cent in 2008 then rising again to 5.3 per cent in 2018.
However the number of long-term unemployed has risen significantly.
In 2018, 24.5 per cent of unemployed people aged 15 and over had been looking for work for more than a year.
In 2009, that figure was 14.8 per cent.
The number of people on income support payments longer term is also stark.
In 2018, close to three-quarters of recipients aged 18-64 had been on a payment for two or more years.
Of people aged 25 60 49 who were receiving payments in 2009, nearly two-thirds were still getting benefits in 2018. More than half of those people had been getting payments in 2000 as well.
The number of people on disability pensions has also declined from from 4.8 per cent in 1999 to 4.4 per cent in 2018, due to the falling number of people with disabilities and a tightening of the criteria for payments.
However there was a notable increase in the number of people claiming carers pensions - from 0.3 per cent to 1.5 per cent - likely due to the increased eligibility age for Age Pension and closure of various partner payments.
But the institute said as the age and characteristics of the Australian population changed, the welfare system needed to as well.
It flagged key population groups with an immediate or possible future need for welfare services, including young children and families, in order to prevent the inter-generational transmission of disadvantage.
It also said the welfare system needed to cater for those likely to experience economic and social hardship, including a disproportionate number of Indigenous Australians, refugees and prisoners.
Social supports should also be targeted at people living in regional and remote Australia, as well as people experiencing entrenched long-term disadvantage or inter-generational trauma.
Older people and those with a disability were also flagged as groups with a future need. More support would be required to keep older people in their homes.