Scottish Secretary Michael Moore has suggested parts of the welfare budget could be devolved to the Scottish Government - but immigration law could not be.
The Liberal Democrat cabinet minister was outlining his view on future devolution for Scotland.
The pro-Union parties insist Scotland will get more powers even if there is a No vote in next year's independence referendum.
Mr Moore said welfare and employment were areas where the possibility of further devolution should be "debated".
There are currently "rough edges" between Westminster and Holyrood's efforts to tackle unemployment, he admitted.
He said: "I am spending a lot of time around Scotland talking to people about youth unemployment, about underemployment, and it makes sense to make these things as tight as possible.
"Areas around bits of the welfare agenda and the employability agenda should be up for debate."
However, he insisted immigration issues should continue to be reserved to Westminster.
"On the immigration side of things it is pretty challenging. Very quickly you get into some very difficult areas. It is a highly integrated economy."
And he admitted there was not a uniform sense of direction among - and even within - the pro-union parties on future devolution.
"Predicting where that process takes us is a mug's game. Will we take a small step or a large step next time, who knows?" he said.
"There are some in the Conservative Party who agree with that and some opposed to it, and some in the Labour Party too. That's why, as I say, you can't predict where this goes."
Deputy First Minister Nicola Sturgeon rejected suggestions of further devolution.
"Only an independent Scotland will give us the powers we need to create a fairer welfare system and scrap punitive Westminster policies such as the bedroom tax which impact most heavily and unfairly on our most vulnerable people," she said.
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