Centrelink has been accused of threatening and harassing vulnerable Australians into updating their personal details using letters emblazoned with the Australian Federal Police logo.
Letters sent out in July under the heading "Taskforce Integrity" warned welfare recipients against deliberately withholding or providing false information to dishonestly collect payments.
Roughly 38,000 residents across four locations were told the task force - run by the Department of Human Services and AFP - was working in their community.
"The majority of our customers do the right thing and tell us about changes to their information," AFP Assistant Commissioner Andrea Quinn wrote.
"We also know that sometimes people make honest mistakes, however, customers who deliberately withhold or provide false or misleading information could be committing fraud."
The letter lists a range of punishments including criminal records and prison sentences, before encouraging recipients to dob suspected fraudsters.
Cassandra Goldie, from the Australian Council of Social Service, said Australia was not a police state and people should not be made to feel like criminals for claiming welfare payments.
"It is completely inappropriate for the government to send letters to income support recipients with the Australian Federal Police logo asking if their details are up to date," Dr Goldie told AAP on Friday.
"These letters are threatening and completely disregard any mental health issue a person may have."
A Human Services spokesperson defended the letter and work of the task force, which was established in 2015 and targets specific areas with high risks of non-compliance and welfare fraud.
"Taskforce Integrity isn't about prosecuting people who make genuine mistakes, it's about enforcing the law and deterring those who set out to commit welfare fraud," the spokesperson told AAP.
Opposition human services spokeswoman Linda Burney said it was reasonable to stop welfare fraud but the letters went too far.
"Whether it's the robo-debt debacle or inserting the AFP's logo onto Centrelink letterheads, this government is only interested in victimising and harassing vulnerable Australians," Ms Burney said.
"The government's approach to ensuring the income security of vulnerable and down on their luck Australians is to delay, defer and deny."
More than 85,000 "co-branded" letters have been sent out by the task force since its inception, using consistent tone and branding.