The Government hopes at least $200 million could be saved if just 5% of recipients are taken off the domestic purposes benefit.
The Government has unveiled a series of welfare reforms it says are designed to break the cycle of dependancy.
The reforms mean people on the unemployment benefit will have to reapply for the dole after 12 months and go through a full work assessment.
More domestic purposes and sickness beneficiaries will be required to look for part-time work, and case managers will be encouraged to penalise beneficiaries who fail work tests.
Social Development Minister Paula Bennett told Morning Report on Wednesday that cost projections from the Treasury show the reforms can generate $100 million worth of immediate savings.
Ms Bennett says that figure could rise to $200 million if 5% of recipients get off the domestic purposes benefit (DPB).
"Projections are anything from $100 million in immediate savings in the next four or five years and another $200 million if we just got five percent off the DPB. I think that's conservative figures from Treasury ... I, of course, think we can do better than that."
Welfare reform details
The changes include requiring those who have been on the unemployment benefit for longer than a year to reapply for it and undergo a comprehensive work assessment.
Those who fail their first work test will have their unemployment benefit halved, and continued non-compliance will result in a total suspension of the benefit.
Two groups of beneficiaries will have to be available for part-time work of at least 15 hours a week. They are parents on the domestic purposes benefit whose youngest child is six, and people on the sickness benefit who have been assessed as being able to work.
Sickness beneficiaries will be reassessed after a year on the benefit.
More jobs anticipated
The Employers and Manufacturers Association says it anticipates tens of thousands of jobs will become available as the economy regains strength.
The association's northern chief executive, Alasdair Thompson, says he expects more than 80,000 jobs will become available as the economy strengthens and up to 4,000 jobs a year could be filled by people coming off social welfare.
However, community welfare agencies are predicting a big increase in the number of people needing their help as a result of moves to tighten benefit rules.
The Auckland City Mission says it has already seen demand for its food bank rise by 70% in the past two years and the new rules will only increase that.
Any further tightening of hardship grants will leave more people reliant on food banks and social services, it says.
Mothers speak out
A solo mother of three from Rotorua, Shirene Walden, says she would have trouble finding work during the hours when her children are at school.
Another Rotorua woman, Christen King, who has eight children, says she is already struggling to find employment.
Maori Party lends support
The Maori Party says it will back the introduction of a bill containing controversial changes to the welfare system, but does not yet know whether it will lend support beyond that.
MP Te Ururoa Flavell says there is concern that the changes may have an impact on the children of unemployed people.
However, he says the party is prepared to support the bill through to the select committee stage, so people can have their say and its position will be reassessed after that.
Legislation is expected to be in place before the end of this year.
