The Conservatives would cap benefits further to fund three million apprenticeships if they win the general election, the prime minister has said.
David Cameron told the BBC's Andrew Marr show he wanted to "abolish" youth unemployment.
A Tory government would cut the maximum benefits a household can claim a year from £26,000 to £23,000, he said.
Unemployed 18 to 21-year olds would be given six months to find work or training.
Their jobseeker's allowance (JSA) payments would be withdrawn unless they agreed to take take part in "community projects" such as cleaning up local parks.
'Life of dependency'
They would be entitled to a "youth allowance", set at the same level as JSA - currently £57.35 for those aged 16-24 while carrying out the community work.
Most unemployed 18 to 21-year-olds would also be prevented from claiming housing benefit in order to leave home under the Conservative proposals.
Mr Cameron said the changes would pay for three million apprenticeships over the five-year lifetime of the next parliament.
The Conservatives have already tried to reduce the benefits cap in government but have been blocked by their Liberal Democrat coalition partners.
The Lib Dems also blocked Conservative plans to scrap housing benefit for the under 25s.
Mr Cameron defended the proposed changes as the Conservative conference was getting under way in Birmingham.
"At heart, I want us to effectively abolish youth unemployment," he told the Marr programme.
"I want us to end the idea that aged 18 you can leave school, go and leave home, claim unemployment benefit and claim housing benefit.
"We shouldn't be offering that choice to young people; we should be saying, 'you should be earning or learning'."
Mr Cameron said the new rules would not apply to people with children, but was aimed at single young men and women so that they did not get trapped in "a life of dependency... that is no life at all".
He said the welfare cap had "worked very well", adding: "People said this would cause chaos, that people would have to move across the country, that it wouldn't work.
"What has happened is a lot of those families have gone into work, have found a job and it's been a policy which has helped them with their lives.
"All the evidence is the cap is too loose, particularly in some parts of the country, so bringing it down to £23,000 saves money, will mean more families getting into work."
Labour leader Ed Miliband has promised a "jobs guarantee" for the young unemployed, to be paid for by a tax on bankers' bonuses if they win the election.
Under Labour's plan 18 to 24-year-olds out of work for a year will be offered a taxpayer-funded job for six months - with those who refuse losing benefits.
In his party conference speech last week, Mr Miliband said a Labour government would aim to boost apprenticeship take-up until it matched the number going to university.