Prime Minister David Cameron insisted the current system is giving the wrong incentives as he urged more action to prevent families relying on state handouts.
Mr Cameron said the existing benefits system was “sending out strange signals on working, housing and families”.
But SNP work and pensions spokeswoman Dr Eilidh White-ford yesterday criticised the shake-up.
“The UK government have already hit low-paid households with housing benefit cuts and these latest proposals seem arbitrary and inconsistent,” she said.
“The Westminster government have their priorities all wrong – they should be focusing on supporting recovery and job creation. Yes, we must look at how best we can reform the benefits system, but reforms should not be built on the Prime Minister’s attempts to get a good headline.
“While the coalition cuts services and support, the SNP is the only party with a clear commitment to protect family incomes by freezing the council tax and delivering the living wage to NHS and government employees.”
Mr Cameron’s plan includes scrapping most of the £1.8 billion in housing benefits paid to 380,000 under 25s, worth an average £90 per week each, forcing them to support themselves or live with their parents instead.
Mr Cameron’s proposal to axe housing benefit for the under-25s would include exemptions for special cases, such as domestic violence.
But he insisted: “We are spending nearly £2 billion on housing benefit for under-25s – a fortune. We need a bigger debate about welfare and what we expect of people.”