Welfare benefits will be slashed by ¥74 billion over a three-year period starting from fiscal 2013, after a government panel found that some people are making more on the dole than the average low-income person who is not spends on living costs, it was learned Sunday.

The decision to lower standard benefit payments by 6.5 percent was made by welfare minister Norihisa Tamura and Finance Minister Taro Aso. The reduction will hit in August.

Since the standard benefit payment provides the basis for determining other levels of public assistance, such as subsidies for school expenses, reducing it may also affect low-income earners even if they are not on welfare.

Tamura said after the meeting that he will implement the measures so the decision does not adversely affect such earners.