A tough new limit is to be imposed on the total amount of welfare payments received by families in the UK, Chancellor George Osborne has told the Conservative Party Conference in Birmingham.
And child benefit is to be withdrawn completely from families where one parent earns enough to pay the higher-rate tax, currently about £44,000.
Speaking at the ICC, Mr Osborne did not put a figure on the new welfare cap, but said that - with the exception of the disabled - no family will receive more in benefits than the average family receives from going out to work.
Mr Osborne said that he and Work and Pensions Secretary Iain Duncan Smith had devised the biggest reform of the welfare state since the war-time work of William Beveridge.
He said it would result in "a radical new welfare state where it always pays to work, where effort is always rewarded and where fraud can no longer hide behind complexity".
And he promised: "For the first time, we will introduce a limit on the total amount of benefit any one family can receive.
"The limit will be set according to this very simple principle: Unless they have disabilities to cope with, no family should get more from living on benefits than the average family gets from going out to work.
"No more open-ended chequebook. A maximum limit on benefits for those out of work, set at the level that the average working family earns.
"Money to families who need it - but not more money than families who go out to work.
"That is what the British people mean by fair - and we will be the first Government in history to bring it about."
The Chancellor said he wanted Britain to be a home for a "successful, competitive and stable" financial services industry.
But in a warning over bankers' bonuses he said: "I want to see genuine talent rewarded. But let me make this clear today: we will not allow money to flow unimpeded out of those banks into huge bonuses if that means money is not also flowing out in credit to the small businesses who did nothing to cause this crash and suffered most in it.
"Nor will we tolerate tax evasion. It is unacceptable at the best of times, it too is morally indefensible in times like these and this party will not stand for it."
Setting out the withdrawal of child benefit, Mr Osborne said: "We still pay over a billion pounds a year in child benefit to higher rate taxpayers.
"Believe me, I understand that most higher rate taxpayers are not the super-rich. But a system that taxes working people at high rates only to give it back in child benefit is very difficult to justify at a time like this.
"And it's very difficult to justify taxing people on low incomes to pay for the child benefit of those earning so much more than them.
"These days we've really got to focus the resources where they are most needed.
"We've got to be tough but fair."
He told the conference: "The hard economic choices we make are but a means to an end. And that end is prosperity for all.
"Not from the quick fix of another debt bubble or by hitching the country's entire fortunes again to the City of London.
"Not growth confined to one corner of our country or one sector of our economy. But lasting, sustainable growth that will only come from releasing the aspirations of the whole British people.
"The foundations of a strong economy don't rest alone on the decisions of chancellors or the spending programmes of government.
"They come from the most basic human instincts of all: the aspiration to have a better life, to get a better job, to give your children a better future."
And he concluded his speech with: "Over the horizon is a Britain that pays its way in the world. A Britain that is a beacon for liberty and justice.
"There may be moments when we can't see it, when it seems just out of reach. But it is always there, calling us to our task. The task of this generation.
"The task of the British people. Together in the national interest."