The report says a simpler system would reduce error and fraud
The benefits and tax credits system is too complicated and must be simplified, a report by the right-leaning Centre for Policy Studies has said.
All claims should be administered by one agency and applicants should only have to fill in one form, it suggested.
Report author and tax expert David Martin added: "We need our benefits system to set people free."
The Department for Work and Pensions said it was simplifying things but "one size fits all" systems would not work.
The report, entitled Benefit Simplification: How and Why It Must Be Done, said there were more than 50 benefits available through different government departments and agencies.
Mr Martin estimated that the total social security bill will reach £186bn by 2010, but insisted that this figure could be lowered if one agency administered all the benefits and tax credits.
He said it would reduce error and fraud and make it easier for claimants to understand what they were entitled to.
Mr Martin also argued that too much time and money is spent re-evaluating information already available and thinks people should fill in one form for all their claims.
He said: "It is time to take the hard practical decisions so that a new unified and simplified benefits system can emerge. And we need this soon."
CPS director Jill Kirby said the projected bill for social security payments was "not sustainable" at a time of economic crisis.
She added: "In its 1997 manifesto, New Labour promised to 'decrease the bills of economic and social failure'. It has failed to do so.
"But for any reform to be effective, simplification is the essential first step."