Young people could be made to do community work for up to 30 hours per week in return for a "youth allowance" of £57.35 a week, or £1.91 per hour of work.
The plan, announced by David Cameron today, would see 18-21-year-olds who have been out of work, education or training (“neets”) for six months made to work in charity shops or making meals for the elderly.
The prime minister claimed that the programme would “effectively abolish long-term youth unemployment”.
“We want to get rid of that well-worn path from the school gate, down to the jobcentre, and on to a life on benefits,” he explained.
The Conservatives said the £20 million policy would be funded by initial savings from the nationwide introduction of Universal Credit.
It is understood that the new plans will not apply to young people who have completed independent work experience in the six months before their benefits claim. Overall it is expected to affect around 50,000 claimants.