I agree that there should be a way to reduce benefits encouraging people to work what they can until they reach some level. Of course that opens a completely new can of worms.
I think there should be a base level of healthcare, food and shelter available to all. If you want to exist at that base level...have at it but it will be a spartan life. Any and all work raises you above that level.
I'm generally in the group that would say all government welfare is bad....but since welfare has been with us for generations, change will have to come slowly. If you take benefits from people cold-turkey, it's not a safe assumption that most of them will find or even seek jobs. They are more likely to steal from the rest of us or become involved in other illegal/money producing activities.
I don't have a problem with a base level of provision, but the base level should be spartan at best....with the purpose being only to sustain life. Food provided shoulld be dried beans, potatoes, flour, cornmeal, eggs some sort of soybean meat substitute, dried milk, etc. No frozen foods. No convenience foods. No softdrinks, coffee, tea, kool-aide, candy, cakes, sweets of any kind, alcohol, tobacco, etc... Allow them to keep these benefits as long as the family income is less than $15K. Reduce 10% of all gov benefits for every $1K they make above $15K. That would give many an incentive to pursue a better life.