You shouldn't be forced to obliterate your retirement savings because you fell on hard times. Welfare should never be set up in a way that incentivizes people to be financially irresponsible.

A better way of encouraging them to work is to not retract the support as quickly as currently done when there is a job. A lot of things are free (like GEZ for example) when you live on social security, but cost money when you have a job. Thus, you might actually be worse off financially. Even if you had 30% more money, is it really worth that small number to get up every morning at 6 am? A better encouragement would be to phase out government support over a longer span of income.