Labour will make cuts to the welfare budget if they win the next election, shadow work and pensions secretary Liam Byrne said.
"I work on the assumption that we are going to inherit a dog's breakfast in 2015," Byrne told BBC Radio 4's Today programme on Tuesday.
"Savings are going to have to be made. I think there will be savings that are needed on welfare spending too. Our challenge is how we spend that money differently to support more people in work."
Speaking ahead of Labour leader Ed Miliband's party conference speech in Manchester, Byrne said unemployment and housing benefit bills also needed to be brought down.
"We have to re-invent social security for modern times and the world of work today," said Byrne.