Closer cooperation between unemployment- and disability insurance providers is necessary to fight poverty, according to the authorities.
Interior Minister Didier Burkhalter said an increased effort was needed to re-integrate people into the job market.
He said the poor deserved the respect and did not need the pity of others, in reference to the Russian author Maxim Gorki.
In its report, the cabinet focuses on equal opportunities in education, improved re-integration into the job market and measures to combat poverty among families.
The government also recommends that the cantonal and local authorities grant additional welfare payments to families in need.
“Welfare must be subject to more coordination,” said Peter Gomm, a representative of the cantonal conference of social security directors.
He welcomed the report as a broad survey on social issues and an official acknowledgement that poverty exists.
The Catholic church charity Caritas described the report as a milestone in the fight against poverty.
The group earlier this year estimated that up to 900,000 people – an estimated 12 per cent of the Swiss population – are in need of social welfare.
However the figure was disputed by other organisations and institutions.
A nationwide conference is scheduled to discuss the issue later this year. It coincides with the European Year for combating poverty and social exclusion.
Urs Geiser, swissinfo.ch