Revealed: Welfare cheats pocketed more than $2.8b they weren’t entitled to

Welfare cheats have pocketed a share of more than $2.8 billion in payments they weren't entitled to, but it's not just fraudsters cashing in.

Some of the money was handed out in error, with the mistakes being blamed on staffing cuts - and recovering it is proving difficult.

It is very important that the system operates with integrity, that people are not overpaid more than they're entitled to," Human Services Minister Michael Keenan said.

Last year almost $3 billion was overpaid, with nearly 2.5 million recipients getting an extra $1200 each on average.

Centrelink clients were overpaid a total of $2.8 billion in 2017. Source: 7 News

Less than half of that amount has been recovered.

"They've been overpaid because they've made a genuine mistake, which is often the case, or they've been deliberately defrauding the system," Mr Keenan said.

Whistleblowers dobbed in 114,000 alleged fraudsters last year, but only one in 10 cases was investigated, with 709 people charged.

Mr Keenan said there were honest mistakes being made but also fraudsters trying to cheat the system. Source: 7 News

"We're collecting four times as much money because of our tip off-line than we were several years ago," Mr Keenan said.

Labor argues the errors leading to overpayments are largely due to having fewer staff to process Centrelink claims or answer queries for clients that could avoid honest mistakes.

Labor argues that more full-time Centrelink staff would fix the problem. Source: 7 News

Around 500 permanent jobs have gone from Centrelink over the past four years and there are now calls to hire more full-time staff and fast-track the department's IT upgrade, launched two years ago, even if that comes at a cost.

"We are working to improve that service delivery always, but I believe the service delivery is actually very good," Mr Keenan said.