Hundreds of thousands on the dole stand to lose their benefits if they have outstanding court fines or are on the run from the law.

Australians applying for benefits will be subject to police checks from March next year.

If they are found to have unpaid fines or a warrant out for their arrest, they will have their benefits stopped or halved if they have children.

Thousands of dole bludgers stand to lose their benefits if they have outstanding court fines or are on the run from the law

The new rules will affect 62,306 claimants in Queensland alone. They owe a total $190million in unpaid fines, reported The Courier-Mail.

The Federal Government also plans to get the unpaid fines by deducting them from welfare payments each fortnight.

The fines include speeding tickets and punishments for public transport violations.

Federal Social Services Minister Dan Tehan said: 'This measure will help with the clearance of arrest warrants, as well as helping people with outstanding warrants avoid jail time.'

It comes after it was revealed more than 70 per cent of welfare cheats who are sentenced to prison for defrauding Centrelink don't actually serve time behind bars.

Over the last two years, only 247 of the 857 who were convicted for defrauding Centrelink and sentenced to a spell in prison actually served out their sentence

Over the past five years, 2012 convicted fraudsters have been sentenced to jail time for welfare rorts, according to data released to Daily Mail Australia by the Commonwealth Director of Public Prosecutions.

But only 572 actually end up serving their sentences in prison, with the rest being released due to a 'recognisance release order'.

In 2013-14, 324 people were sentenced to a term of imprisonment but only 91 actually served time. The trend continued each year leading up to 2018.

In 2014-15, 106 people out of 367 sentenced served time in prison, while in 2015-16 128 out of 464 ended up behind bars.

Over the last two years, only 247 of the 857 who were convicted for defrauding Centrelink and sentenced to a spell in prison actually served out their sentence.

Those who don't serve time are 'released forthwith' according to the CDPP.

About 500,000 people have dobbed someone in who they believe is cheating the welfare system in the last five years.

Since July last year the government has received 8,000 tips leading to the identification of more than $18million in debts.

The information is revealed as welfare recipients with unpaid court fines or outstanding criminal warrants will be targeted under new hardline government measures laid out in the budget.

People with outstanding Centrelink debts of more than $10,000 will be aggressively pursued as the government tries to get money back from people who are no longer on welfare.

'We will ensure our targeted safety net helps people when they need it, but that people receive only what they are entitled to, nothing more and nothing less,' Social Services Minister Dan Tehan said in a statement on Tuesday.

'When welfare recipients have received money they are not entitled to, we will ensure those debts are repaid.'

The Turnbull government has stared down demands from a rare alliance of business, industry and community groups calling for an increase to the Newstart allowance in the budget.