The Turnbull government is considering linking welfare payments to school attendance based on its highly successful "no jab no play" program.
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The Social Services Minister, Christian Porter, said the program demonstrated how people's behaviour could be changed with a financial incentive.
"Mutual obligation can be very successfully applied to greater effect, as we have seen with the obligation to vaccinate children," Mr Porter said on Tuesday.
Since the program was introduced, immunisation rates have increased across the board for one, two and five-year-old children. For the first time, five-year-old coverage rates are now over 93 per cent, the highest ever.
Mr Porter said that particular program was so successful because it was carefully targeted and based on thorough research.
"What I'm proposing, simply, is that there are other areas where if you had the same stringency of design, it's quite possible that you could have also very good results. I must say that one of them, to my way of thinking, is the linking of payments to school attendance," Mr Porter said.
"That's been mulled over for a long time but with the sort of data that we've got available, and the ability to track longitudinally success rates on a range of measures, I think these things are worth looking at."
The federal government is now looking at trials of linking school attendance to welfare payments.
Mr Porter told the National Press Club in Canberra that the current system of welfare was failing people.
He said although he had no interest in cutting people's payments, he wanted to make sure that the government did more to ensure people did not spend a lifetime out of the workforce and on welfare.
"The situation where you have just on half and potentially more households drawing from the system than contributing to it is like a snake eating its own tail. That is to say that it does not work so well after about halfway," Mr Porter said.
Research has identified three groups of people - young people with caring responsibilities, single parents and some students - who were most at risk of spending a life on welfare.
He announced a $96 million fund that would provide not-for-profit organisations with money to trial innovative ideas about how to reach those people and get them into work or study.
Labor's social services spokeswoman, Jenny Macklin, said Mr Porter's speech "raised more questions than it answered".
