John Healey is planning to send 2,000 anti-fraud experts into Jobcentres in a bid to crack down on benefits cheats and save taxpayers £1.4billion.
The Chancellor is expected to announce at the Budget that fraud-busting officials will team up with Work Coaches to spot suspicious Universal Credit claims early.
Tougher checks on claims abroad are also expected, targeting fraudsters who fail to report they have left the country in order to keep payments flowing.
Benefits scroungers have been altering their documents to beat the system and claim thousands of pounds.
One cheat pocketed nearly £39,000 from taxpayers while living in Zimbabwe and collecting rent from a UK property.
Another Universal Credit claimant from the Midlands submitted an application for support with childcare costs – but listed their address as a derelict building in the local area.
New data-driven checks will identify potential breaches of benefit travel rules, exposing bogus claims and protecting public money.
A Treasury spokesman said: 'We need to make the most of every pound of taxpayers' money and cut fraud to ensure the welfare system is fair and sustainable.
John Healey is planning to send 2,000 anti-fraud experts into job centres in a bid to crack down on benefits cheats and save taxpayers £1.4 billion
'At the Budget, we're rooting out those who abuse the welfare system, while protecting those who need it most.'
Britain's benefits bill is set to soar by £5.5billion next year – significantly more than forecast – as Andy Burnham rejects 'crude' cuts to welfare spending.
An analysis by the Institute for Fiscal Studies found that total spending on welfare would rise by around £5.5billion in 2027.
That is as much as £2.2billion more than the Treasury has budgeted for, based on Office for Budget Responsibility (OBR) forecasts.
Many benefits increase every April in line with the Consumer Prices Index (CPI) inflation rate from the previous September.
Official figures published on Wednesday showed the CPI inflation rate for September this year was 3.5 per cent, more than the OBR forecast of 2.3 per cent across 2026.
This is the highest rate in almost a year and the sharp rise – from 3.1 per cent in August – was blamed on soaring fuel costs due to the Iran war.
The Prime Minister has insisted he will 'bring the welfare budget down', but Mr Burnham has ruled out 'crude' cuts to benefits in doing so.
The Government is expected to soon publish two reports – on youth unemployment and disability benefits – before coming forward with welfare reforms next year.
But ministers are braced for the high upfront costs of measures to tackle youth inactivity to exceed planned cuts to benefits for the next two years, until 2029.
It means Britain's benefits bill – which is estimated to currently stand at around £160billion – could continue rising into the 2030s.
Helen Whately, the Tory shadow work and pensions secretary, said: 'Higher inflation means higher benefit bills, piling more pressure on the public finances while families and businesses are already struggling with rising costs.
'Labour's tax rises and red tape are driving up costs for businesses. At the same time, the Government are handing out billions more in welfare, leaving hardworking taxpayers to foot the bill.'
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