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Labour Deputy Leader Harriet Harman says growth in the economy needs to be addressed as part of welfare reform
Labour wants to "strengthen the old principle of contribution" in the benefits system, the shadow work and pensions secretary says.
Many people "feel they pay an awful lot more in than they ever get back", Liam Byrne wrote in the Observer.
He also said "people who work and contribute to their community" should get priority in social housing.
He criticised recent tax and welfare changes, but David Cameron told the Sun the moves were about "fairness".
In his article, Mr Byrne criticised the coalition for failing to support "working families and those in real need", insisting that Labour's approach to reforming welfare would be "very different".
Change needed"Instead of seeking to divide people, we want to ensure everyone plays their part so we can rebuild Britain together," he said.
He continued: "There are lots of people right now who feel they pay an awful lot more in than they ever get back. That should change.
"We should start by letting councils give priority in social housing allocations to those who work and contribute to their community."
BBC political correspondent Carole Walker said Labour had been under pressure to say what it would do to overhaul the welfare system, after criticising government policies.
The changes to income tax coming into effect on 6 April include:
- A cut in tax rate from 50% to 45% for those earning more than £150,000
- The 40% tax rate now starts at an income of £41,450. Previously it was £42,475
- An increase in the tax-free personal allowance to £9,440, from £8,105
- The amount of tax-free income pensioners can earn remaining frozen at £10,500
The party's deputy leader, Harriet Harman, said it was "not surprising" people were concerned about the welfare system and defended Labour's record on welfare reform.
She said the party was looking at wider changes based on the contributory principle as part of its policy review.
She told the BBC's Andrew Marr Show: "We're also, ahead of the general election, putting forward three principles.
"One, that work should pay; secondly, that there should be an obligation to take work; and thirdly, that there should be support through a contributory principle for people putting into the system as well as taking out.
"I think that's the discussion and the debate we're engaging in up to the general election."
She said the results of the review would "come to fruition" in Labour's next manifesto.
Last week, Mr Byrne told the BBC he was looking at helping two groups in particular - working parents and those who are unemployed and over 50.
He said there were many women who had paid into the system but who then did not receive help with childcare to allow them to go back to work.
For those looking for work over the age of 50, he said although some may have paid up to £60,000 more in national insurance than they get out, they were not receiving any extra help to get back into work.
The case of unemployed Mick Philpott, jailed last week for the manslaughter of six of his children in a fire, has led some politicians to comment on whether the state should subsidise large families.
Mr Philpott, who had 17 children, received thousands of pounds a year in child benefit, as well as the income support and wages paid to his wife and mistress.
'Support children'Asked if there should be a cap on the number of children the state would support through benefits, Ms Harman said: "I don't think that the state should be dictating family size but I do think that the state should support children."
"Rather than trying to encourage women to have children or discourage them from having children, I think it's important to actually support children who are born into a family. But also to make sure women and men are in a position to make proper choices about their families."
Meanwhile, Mr Cameron told the Sun the welfare system had lost its way and benefits had become a "lifestyle choice" for some - causing resentment.
He insisted it was "crazy" certain claimants could have a bigger income on benefits than if they had a job.
"So this month we are making some big changes," he added.
"They are changes that have a simple principle at their heart: we are restoring the fairness that should lie at the very heart of our tax and welfare systems."
This week, a series of changes to benefits and taxes have come into force.
Most tax credits and working age benefits are being increased by 1% - below the rate of inflation - while pensioners are getting a larger rise in the state pension, which is going up by 2.5% to £110 a week.
On Saturday, the personal allowance - which is the amount that most people can earn before they pay income tax - rose to £9,440.
And the top rate of income tax was also reduced from 50p in the pound to 45p for people with incomes of more than £150,000.
Also from 6 April, the amount pensioners can earn without paying tax will no longer rise with inflation, giving rise to accusations of a "granny tax".
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