Work and pensions secretary Iain Duncan Smith said that he "aspires" to bar immigrants from claiming benefits for up to two years.
Speaking to the Sunday Times, Duncan Smith said that he was working with countries including Italy, Germany, the Netherlands and Finland to tighten up EU laws and restrict the benefits immigrants are able to claim.
He said there was a "a growing groundswell of concern about the [immigration] issue" and Britain should ask migrants to "demonstrate that you are committed to the country, that you are a resident and that you are here for a period of time and you are generally taking work and that you are contributing".
He added: "At that particular point ... it could be a year, it could be two years, after that, then we will consider you a resident of the UK and be happy to pay you benefits."
Colleagues of Duncan Smith stressed that he was not outlining a new policy, but expressing an 'aspiration'.
Europe's Employment and Social Affairs Commissioner Laszlo Andor pointed out that immigrants were net contributors to the UK economy.
In an interview with the BBC, he said that the debate on immigration in the UK was damaging the UK's image.
"We shouldn't assume that the UK welfare system is a lot more generous than that of many other countries. France, Denmark and a few other countries have significantly more generous welfare systems," he said.
"The migrant workers altogether are net contributors to the system. They take out much less in the form of benefits or welfare services than what they contribute in the form of taxes or contributions to the system."
Christian Dustmann, an economics professor at University College London, said that his research showed that immigrants claimed less in benefits than native Britons.
"We have looked at the overall receipt of transfers and benefits, which of course include child benefit, housing benefit and other forms of benefits, and what we find is that migrants from EU countries are 33% less likely than UK natives to claim any form of benefits," he said.
Duncan Smith's announcement comes after 95 Tory MPs wrote to David Cameron saying that Britain should have the right to veto new EU laws.
According to the Sunday Telegraph, backbench MPs including Bernard Jenkin, James Clappison, Conor Burns, John Baron, Anne Main and former defence minister Sir Gerald Howarth want Britain to be able to veto regulations that damage the country's "national interest".
The debate over immigration has reignited in recent weeks after restrictions on Romanian and Bulgarian immigrants working in the UK were lifted.