The long-term unemployed will only receive their benefits if they sign on at a jobcentre every day or commit to a six-month stint of voluntary work under the Government's new Help to Work scheme.
Prime Minister David Cameron says the scheme is designed to ensure "that everyone who can work is in work".
Ministers claim there are more than 600,000 vacancies in the economy at any one time, saying the new measures are intended to help unemployed people fill them.
The voluntary work could include gardening projects, running community cafes or restoring historical sites and war memorials.
The placements will be for up to six months for 30 hours a week and will be backed up by at least four hours of supported job searching each week.
Mr Cameron said: "A key part of our long-term economic plan is to move to full employment, making sure that everyone who can work is in work.
"We are seeing record levels of employment in Britain, as more and more people find a job, but we need to look at those who are persistently stuck on benefits.
"This scheme will provide more help than ever before, getting people into work and on the road to a more secure future."
Mr Duncan Smith says many people were written off under the previous system Work and Pensions Secretary Iain Duncan Smith said: "Everyone with the ability to work should be given the support and opportunity to do so.
"The previous system wrote too many people off, which was a huge waste of potential for those individuals as well as for their families and the country as a whole. We are now seeing record numbers of people in jobs and the largest fall in long-term unemployment since 1998."
Unite assistant general secretary Steve Turner said there was no evidence that such "workfare programmes" get people into paid work in the long-term.
"We are against this scheme wherever ministers want to implement it - in the private sector, local government and in the voluntary sector," he said.
"It is outrageous that the Government is trying to stigmatise job seekers by making them work for nothing, otherwise they will have their benefits docked."
Shadow employment minister Stephen Timms said: "Under David Cameron's government nearly one in 10 people claiming Jobseeker's Allowance lack basic literacy skills and many more are unable to do simple maths or send an email.
"Yet this Government allows jobseekers to spend up to three years claiming benefits before they get literacy and numeracy training.
"A Labour government will introduce a Basic Skills Test to assess all new claimants for Jobseeker's Allowance within six weeks of claiming benefits."
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