Mr Fletcher, who did not condone fraud of any kind, said illegally claimed welfare payments were relatively slight compared to other types of fraud and tax evasion.
"Let's look at all the companies and people with money in this country that are dodging it with their trusts [and] that are moving it offshore so they don't have to pay tax."
A Victoria University tax lecturer last year estimated tax evaders cost the country between $1billion and $6billion in 2011, while welfare fraud totalled $39million for the year.
About 6900 Western Bay residents claimed a benefit during March. Dole claimants numbered around 900, up from 687 a year earlier.
Eighty-three-year-old Eileen Marie Farquer, who fleeced $215,000 from the system over 25 years, was sentenced to 12 months' home detention in November.
The Te Puke pensioner, who is partially deaf and requires a walking stick to move, was caught when she drove into the path of a fuel tanker and had to be admitted to hospital.
Farquer, who used a fake identity to illegally claim benefits while also receiving welfare payments under her own name, admitted during the ministry investigation she was purposely playing the system.
In April Gate Pa resident Kalolaine Feofa'aki Funaki was sentenced to five months' home detention and 150 hours' community work after lying about her marital status and earning more than $70,000 in benefits.
Nationally nearly 400 fraudsters were prosecuted between October and March for illegally claiming welfare payments that totalled just over $13.7million.
Associate Minister for Social Development Chester Borrows said welfare fraud was a "crime of dishonesty", comparable to any other type of theft. "The Government makes no apology for treating it as such. It is a crime which costs the taxpayer millions of dollars a year, money which could otherwise be spent on other important Government services such as health, education, and supporting vulnerable children and families."
A breakdown by benefit type shows fraudulent cases relating to the domestic purposes benefit (DPB) racked up the largest amount in overpayments.
Nearly $8.36million was recorded for DPB-related prosecution cases.
Mr Borrows said most beneficiaries were law abiding.
About 300,000 Kiwis were receiving benefits at any given time.
"It is only a tiny minority who think it's okay to lie, break the rules, and defraud the taxpayer.
"Those who suggest people commit welfare fraud out of need are making half-hearted excuses for the greed of a few," he said.
He added, "In doing so they belittle the vast majority of beneficiaries who follow the rules, even when times are tough."
The figures also reveal that fraud prosecutions relating to the invalid's benefit, unemployment benefit and accommodation supplement totalled more than $1million each in overpayments during the six month to March 31.
Earlier this year Mr Borrows announced new measures targeting welfare fraudsters. Those included a proposed law change enabling partners and spouses of beneficiaries illegally fleecing the system to be held accountable, and greater data sharing among government agencies such as Inland Revenue, Housing NZ and ACC.
Benefit fraud prosecutions by court, October 1, 2012-March 31, 2013
Tauranga, 16 court prosecutions, $699,318 overpayment value.
Waihi, 4, $286,757.
Western Bay total, 20, $986,076
.Note: Overpayments detected by the Ministry of Social Development may differ from prosecution amounts stated in court, as the Crown can seek to recover a different amount from what is actually owed.
Source: Ministry of Social Development
