A national taskforce will be established to combat welfare cheats, who have been accused of defrauding the system almost $5 billion, according to reports.
Human services minister Stuart Robert will announce on Thursday an Australian Federal Police led effort to recover some of the debt and chase criminal charges, according to News Corp.
The fraud allegedly includes the services Newstart, Medicare, Youth Allowance, family payments and the Disability Support Pension.
Suburbs around the Rockdale area of Southern Sydney will be hit first, as it was reportedly responsible for more than 800 cases of overpayment or purposeful fraud.
That came to a total of $2.2 million and there are now 36 criminal investigations underway as a result.
It is alleged organised crime syndicates are also involved around the country.
The taskforce will hunt unexplained wealth, undisclosed changes of circumstances and undeclared income.
“Most people are honest and when they get something wrong, they want to do the right thing and fix their mistake,” Mr Robert told News Corp.
“However, the unfortunate reality is there remains a small slice of the community who still think it is OK to cheat the system and take more than they are entitled to.
“Anyone taking welfare payments dishonestly has to understand this is theft, and the consequences are serious.
“You will get caught, you will have to pay the money back and you may be prosecuted and go to prison. If you have profited from the fraud your assets may also be seized as proceeds of crime.”