The National Party says it would introduce tougher rules to target benefit fraud, include sanctions against recreational drug users and those on the run from police.
Party leader John Key and social development spokesperson Paula Bennett announced the policy in Auckland on Tuesday.
Beneficiaries who declare themselves unavailable for work because of drug use could have their benefits suspended.
Ms Bennett says too many people are making themselves unavailable for work because they're using drugs, and there are no consequences at present.
"At the moment we have young people who simply say 'don't bother putting me forward for those jobs because I won't pass a drug test'."
If there is warrant out for someone's arrest, their benefit would be suspended until the warrant has been cleared. If that person had children, he or she would continue to receive half their benefit.
The party would create a team of eight specialist benefit fraud investigators and extend data matching between government agencies.
National says increased data matching this year found that 6 - 12% of people were receiving benefits when they should not have been.
In the last financial year, National says, there were 690 benefit fraud prosecutions and $183 million in overpayments.
The party also wants to review the Social Security Act to make it easier to prosecute people who abuse the welfare system.