David Cameron will discuss slashing benefits for young people today as he warns the welfare system is causing deep social divisions.

In a major speech, the Prime Minister is to suggest stripping housing benefit from the under-25s and forcing them to live with their parents.

Key Points

  • Cameron to give major speech on welfare
  • Expected to suggest stripping housing benefit from under-25s
  • Will also hint at restricting handouts for large families

He will also float a time-limited unemployment benefit, and hint at restricting handouts for those who have large numbers of children.

Cameron will tell an audience in Kent: "We have, in some ways, created a welfare gap in this country – between those living long-term in the welfare system and those outside it.

"Those within it grow up with a series of expectations: you can have a home of your own, the state will support you whatever decisions you make, you will always be able to take out no matter what you put in.

"This has sent out some incredibly damaging signals. That it pays not to work. That you are owed something for nothing. It created a culture of entitlement.

"And it has led to huge resentment amongst those who pay into the system, because they feel that what they're having to work hard for, others are getting without having to put in the effort."

Welfare reforms

Cameron will say it is time to ask "searching questions about working-age welfare: what it is actually for; who should receive it; what the limits of state provision should be; and what kind of contribution we should expect from those receiving benefits".

The premier will say the coalition's reforms are based on getting people into work, insisting that "compassion isn't measured out in benefit cheques – it's in the chances you give people".

"We need to think harder about who receives working-age welfare," Cameron will say. "If it is a real safety net, then clearly it's principally for people who have no other means of support, or who have fallen on hard times.

"But there are many receiving today who do not necessarily fall into these camps.

"For example, the state spends almost £2 billion a year on housing benefit for under-25s. There are currently 210,000 people aged 16-24 who are social housing tenants. Some of these young people will genuinely have nowhere else to live – but many will."

He will say that many young people are "living with their parents into their 30s" before they can buy a home, while "for many others, it's a trip to the council where they can get housing benefit at 18 or 19, even if they're not actively seeking work".

'Difficult territory'

Cameron will indicate that he wants to adjust the benefits system so it does not encourage people to have large numbers of children.

"If you are a single parent living outside London, if you have four children and you're renting a house on housing benefit, then you can claim almost £25,000 a year," he is to say.

"That is more than the average take-home pay of a farm worker and nursery nurse put together. That is a fundamental difference."

The premier will admit that he is straying into "difficult territory". "But at a time when so many people are struggling, isn't it right that we ask whether those in the welfare system are faced with the same kinds of decisions that working people have to wrestle with when they have a child?" he will add.

Cameron is to suggest that more should be demanded from claimants, complaining that it is possible to stay on benefits for years without being forced to achieve basic literacy and numeracy skills.

He will also say: "We have yet to introduce a system whereby after a certain period on benefits, everyone who was physically able to would be expected to do some form of full-time work helping the community, like tidying up the local park. But wouldn't this be a perfectly reasonable thing to expect?"

Protecting pensioners

However, Cameron will dismiss calls from many quarters for cuts to universal pensioner benefits such as winter fuel payments, free TV licences and free travel.

"I was elected on a mandate to protect those benefits – so that is what we have done," he will say.

The Prime Minister will indicate that most of his plans would be taken forward by a Tory government in the next parliament.