The Social Development Ministry detected a combined $491,190 in overpayments.
Mrs Olsen, who did not condone any type of fraud, said beneficiary crimes were relatively slight compared to other types of fraud.
"They target all these beneficiaries, make them look as if they're really, really bad, bad guys," Mrs Olsen said..
"Yet you look at all these big white collar [criminals] that get away and really wreck people's lives."
A Victoria University tax lecturer last year estimated tax evaders cost the country between $1 billion and $6 billion in 2011, while welfare fraud totalled $39 million for the year.
Dannevirke woman Danuella June Aroha Broughton was last year sentenced to four months' home detention after obtaining nearly $48,000 in illegal benefit payments over three years.
Nearly 1400 Bay residents claimed unemployment benefits in March, down from 1834 a year ago.
The total number of benefits being collected across Hawke's Bay dropped from 13,407 to 12,604.
Nationally, nearly 400 fraudsters were prosecuted between October and March for illegally claiming welfare payments that totalled just over $13.5 million.
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," Mr Borrows said.
A breakdown by benefit type shows fraudulent cases relating to the domestic purposes benefit (DPB) racked up the largest amount in overpayments.
Nearly $8.25 million was recorded for DPB-related prosecution cases.
Mr Borrows said the majority of beneficiaries were law-abiding citizens. Around 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.
"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 $1 million each in overpayments during the six month to March 31.
Overpayments for the sickness benefit, extra help and "other assistance" - which includes disability allowances and special needs grants - and other main benefits like New Zealand superannuation and the widow's benefit ranged between $248,000 and $876,000.
Earlier this year, Mr Borrows announced new measures targeting welfare fraudsters.
These included a proposed law change enabling partners and spouses of beneficiaries illegally fleecing the system to be held accountable, and increased data sharing between government agencies such as Inland Revenue, Housing NZ and ACC.APNZ
