The idea that this would work is predicated on the notion that people aren't looking for jobs hard enough because they're not worried enough about being homeless and feeding their family; true motivation, then, comes only from putting someone's life on the line.

In reality, this is just a cruelty imposed upon the vulnerable for its own sake, because the people in charge feel that the poor are poor because of some flaw of character, and therefore they are below us and deserve to suffer.

It's the government benefits equivalent of hitting a kid with a ruler because they got a question wrong and expecting them to get the question right next time.