Everybody not involved misses the point of paying unemployment benefit or Newstart Allowance as it is known today. The clear and sole purpose is to enable a recipient to look for work. Have a look at the Social Security Act and The Guide to Administration of the Act. Recipients are under a number of obligations as far as job seeking is concerned. To actively seek work in a wide range of industries and occupations and not to restrict themselves to a particular occupation or industry. To be prepared to travel up to 1 1/2 hours each way to and from a job. To accept any suitable work offered to them, and other conditions.
The politicians make it difficult to cancel the benefits of those not complying by allowing a series of appeals. Welfare recipients vote! and the Department makes it hard by not providing sufficient review staff or facilities to provide hard nosed adequate coverage of recipients activities.
As to relief work, work for the dole schemes, and make work schemes, these have rarely been anything other than a disaster, little done, little learned, and the clients are usually the dregs of the labour force who resent being forced onto these schemes.
Whilst on these schemes they are not looking for work!
There are no doubt numbers of unemployed who took a concious decision to "retire" on the dole, however most long term unemployed are difficult to place in employment for one or more of many reasons. Some are - age (over 45's are commonly ignored by employers), lack of recent employment experience, lack of skills or qualifications, obsolete skills (think of jobs like watch maker, many printing trades), poor English, Aboriginal, ex-convict or recently released prisoner, health and incapacities, compensation history (try to get a job at BHP if you have this), poor literacy, unattractive (obese, tattoos, body hardware, outlandish hair styles and dress, poor grooming and hygiene).
Unless someone who is long term unemployed started off with considerable savings, by the time they have been three or four years unemployed without any little secret sidelines, they become dirt poor. Newstart is not a generous payment and barely supports a very modest lifestyle particularly if the client is seriously and actively seeking work as they are supposed to be.

