Currently, people who are receiving welfare benefits and are convicted of a crime and fined can only be made to pay a maximum of $8 from their benefits, The Daily Telegraph reported.
Prime Minister David Cameron would like to see that raised to $40 to ensure criminals on welfare lose a "significant amount of their benefits."
He said: "People need to understand if they commit a crime they will face the consequences. The system as it stands at the moment is far too soft and does not send the right signal. If you commit a crime and you are on benefits you can no longer expect to get away with paying the bare minimum."
Ian Duncan Smith, the Work and Pensions Secretary, said the new fine system could deter anti-social behavior.
"The summer riots showed that, for many people, the present system didn't make them think twice about what they we're doing. The prime minister and I were clear that we would look at all parts of the benefits system so feel the full effects of their actions. I do not want to be in the business of leaving people without any means of supporting themselves," he said.
The change in rules for fines, which would begin in 2013, is part of a wider government effort to increase penalties for people who commit crimes while relying on the state for money.
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