In British Columbia, jobless welfare recipients who do not meet exemption criteria get only two years of assistance in every five. Those who have children saw payments reduced by 10 to 15 per cent. As a result of the policy introduced in 2004, about half of those on welfare who were expected to work found jobs.

In the US, the government set a five-year limit on benefits, but can set shorter limits. Studies found most recipients were working six months after losing their assistance.

'Both places have undergone some successful reforms and their experiences are worth noting,' Director of Social Welfare Paul Tang Kwok-wai said.

The government launched a review early this year of the Comprehensive Social Security Assistance scheme (CSSA). A key issue is whether a time limit should be imposed on those able to work. The study is expected to be completed for public consultation by the end of the year.

Another government source said the administration was concerned about the growing number of able-bodied welfare recipients, especially youngsters, despite the economic recovery.

Official statistics show the city's jobless rate fell from 7.3 per cent in January 2003 to 4.8 per cent last month. But the number of unemployed welfare cases fell by only 4.4 per cent in the same period, from 40,974 to 39,175.

More alarmingly, the percentage of people who have received unemployment benefits for three years or longer rose from 35 to 56 per cent.

A series of measures were introduced three years ago to reduce reliance on welfare. Unemployed welfare recipients are required to attend job interviews and perform more community work, but they will be allowed to keep more money in their pockets if they find a job.

'You can see clearly from the figures that the measures are not effective enough to get more people out of the safety net,' the source said. 'The situation will get worse if there is another downturn.'

The source said the government had not yet drafted a concrete proposal, and that other measures, such as a better job-matching service and an increase in the amount recipients can earn, would be in place if a time limit was imposed.

Legislator Fernando Cheung Chiu-hung said welfare recipients in the US had support from charities and non-governmental agencies. 'But CSSA is the only safety net in Hong Kong. People will be helpless if their welfare payments are cut off.'

Ho Hei-wah, director of the Society for Community Organisation, asked: 'Why don't they go to the Scandinavian countries to study how good their welfare systems are?'