Nearly 1m people who are in work and claim benefits may be required to work longer, increase their earnings or face losing access to the new universal credit, two welfare ministers, Lord Freud and Mark Hoban, said on Monday.

The state's capacity to ask more of those in work and those that are self-employed is likely to be transformed by the introduction of universal credit in April, the ministers said at a Policy Exchange event.

Lord Freud, the welfare minister, said: "The fact that those in work will come under the ambit of the JobCentre Plus for the first time as a result of universal credit gives the government radical new opportunities.

"Those in work currently face no obligations within the system to increase their hours in work and the system offers them no incentives to do so either. People on low wages can lose up to 96p in every £1 they earn as they increase their hours in work."

He claimed that as a result employers told him their staff did not want to work longer hours for fear of losing benefits. He cited B&Q as one firm that had told him their staff repeatedly requested not to work longer hours for fear of losing benefit: "This conversation is replicated in company after company."

He claimed work incentives under universal credit will be as much as 12 times more generous, as recipients will retain more of their extra income. Critics say that the system will penalise those who can't increase their hours. Hoban said that as part of the drive to keep part-time workers in work for longer, he proposed these workers could receive monthly statements telling them how much better off they would be if they increased their hours, as well as receive texts telling them how much they will benefit from working longer hours, or getting better-paid work through developing higher skills.

He said new demands could also be placed on the self-employed, pointing out that the tax credit system as it stands allowed people to pursue hobbies, earn nothing and subsidise their income through state support "without any expectation that they will increase their earnings and move towards self-sufficiency. This flies in the face of a principled welfare system".

The latest phase in DWP thinking came as the thinktank Policy Network published separate comparative international polling showing little support in Britain for a shift away from a traditional welfare state to one more similar to Northern Europe, where spending is focused on supporting working families and early years.

The Policy Network paper, backed by YouGov polling, claims that a conservative bias in social attitudes to welfare – entrenched support for the traditional welfare state, promising higher pension payments, social security benefits, and public spending on health and education – has been reinforced by the financial crisis, while public support for welfare spending on new social risks such as gender equality childcare and skills has little support.

The DWP said: "Universal credit brings together a vast array of on- and out-of-work benefits, and is due to be spread across the UK by 2017. Currently, workers who claim tax credits or housing benefit have no expectations placed upon them to help them reduce their reliance on welfare. Under universal credit, working claimants who could reasonably be expected to increase their earnings will be expected to take action to do so."