The idea is to simplify the system. Each benefit is assigned a "welfare tax rate" (public housing 15%, food stamps 5% etc.). If someone applies for the whole benefits package the welfare tax rates add up to something around 30% (exact numbers open to political discussion). Anyone can apply for any benefit. There are no rules for eligibility. However, if a person receives benefits and has income from other source that income is taxed at the sum of the welfare tax rates plus the regular income tax rate. Welfare status can be changed quarterly.

The whole welfare procedure would be simplified to something like "You want which benefits? OK, here they are. We will inform the IRS to add 12% to your income tax rate.". Someone who thinks s/he can start a business and make some money can still stay on welfare until the business is established. The penalty is a higher higher tax rate, but then there is some guaranteed housing.

There are still loop holes for abusing the system (like deferred payment of wages until welfare stops), but the simplification makes it easier to detect abuse. There will be significant savings in the welfare administration, even application and processing via Internet should be possible since nothing about the applicants income and possessions needs to be verified.