Too many people on benefits see it as a "lifestyle choice" rather than a safety net, welfare minister Lord Freud has said.
The comments led to disability charity Mencap accusing the minister of being "seriously out of touch" - while Labour claimed the "nasty party" was back.
Defending government plans to place a cap on benefit payments in an interview with the House magazine, the Tory peer said the current welfare system was "dreadful" and led to dependency.
“The point about the benefit cap is it is making a statement about what are the limits of a welfare system," he said.
"It’s saying that people should not get more by living on welfare than the average person in the country gets from earnings, so it’s a very basic statement around fairness.
He added: "The welfare system is there to support people back into independence; it is not there as a lifestyle choice.”
Freud's comments were criticised by Labour's shadow work and pensions secretary Liam Byrne, who told The Guardian: "The nasty party is well and truly back. This government has comprehensively failed to get Britain back to work and frankly it's a disgrace that ministers now choose to kick people when they are down rather than even pretend to offer a helping hand."
Before becoming a Tory peer in 2009, Freud tried to reform benefits under the Labour government when he was hired by Tony Blair to recommend changes to the welfare system 2006.
He also worked for Labour work and pensions secretary James Purnell and told House that his reforms of welfare would have been put in place had they not been blocked by Gordon Brown.
Freud is not the first coalition minister to attack people for choosing a "lifestyle" of benefit payments. In September 2009, George Osborne made a similar criticism.
"People who think it is a lifestyle to sit on out-of-work benefits," hes aid. "That lifestyle choice is going to come to an end. The money will not be there for that lifestyle choice."
Plans to cap benefit payments have caused tension at the heart of the coalition, with former Lib Dem minister Sarah Teather damning the plan as "immoral".
Mark Goldring, chief executive of learning disability charity Mencap, said he was "deeply concerned by Lord Freud's view that 'poor people have the least to lose so should take the biggest risks'."His comments show that he is seriously out of touch with the realities of poverty for many disabled people, who are struggling to make ends meet and are living in fear of big cuts to vital benefits and support next year," he said.