The bill for benefit fraud bill has dropped but more action is still needed, the minister for welfare reform said today.
According to Lord Freud, there was more to be done to stop the £1.2bn cost to the taxpayer each year.
The Department for Work and Pensions (DWP) figures showed total overpayments due to fraud and error stood at 2.1% of all benefit expenditure or £3.4bn over the last year.
And overpayments due to claimant error rose to a record high of £1.4bn in the last year.
Lord Freud said: "We are fighting the battle against fraud and making advances, but fraud in the benefits system remains a huge problem.
"We have given our teams more resources and more powers so investigators are now actively tracking fraudsters, using a mixture of the latest technology and old-fashioned detective work."
He added that the incoming universal credit system would make fraud much harder to commit and easier to trace quickly.
"Clearly something is dramatically wrong with the current system when more money is lost because of mistakes by claimants than because of fraud," Lord Freud said.
"With Universal Credit bringing together six benefits into one, the system will be much easier for individuals to understand, and less vulnerable to human error."
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