How does welfare possibly hold people back when they're required to look for a job on it?
Someone who risks homelessness may have more incentive to find a job, but they're also going to have more difficulties. It's easier to look for a job on a full stomach; it's easier to look for a job with a roof over your head; it's easier to look for a job with internet access; it's easier to look for a job when you're not constantly worried about losing it all. Welfare gives you a stable place from which to find employment.
If your argument is that people abuse the position of welfare, and don't look for a job, then that's a criticism of its enforcement, not welfare itself.