The City of Ottawa is dealing with an unusually high number of welfare fraud cases this year, and it's feared new eligibility requirements for Ontario Works could add to the problem.

The city, which administers the provincial welfare program, has cut benefits to 260 clients due to fraud so far in 2017, putting it on track for the highest number of fraud cases since 2013, or double the annual average.

The rise can be at least partly explained by the steady increase in the number of Ontario Works recipients. More than half-a-million people receive the income support benefits each month, and more than 37,000 of those are in Ottawa.

"It's corresponded to the case load increase," said Micheline McTiernan, a director with the city's community and social services department.

However instances of fraud are currently rising at a faster rate than the number of Ontario Works cases, and the surge shows no signs of slowing.

New eligibility rules

At the same time, Ontario has eased welfare eligibility requirements, allowing thousands more to apply for benefits.

Previously, individuals with more than $2,500 in the bank were automatically ineligible for income support. On Sept. 1, the asset limit quadrupled to $10,000, while total monthly benefits increased by up to two per cent.

Advocates say it's a welcome change.

"The people who need these benefits are often people who have more than $1,000 in the bank," said Gary Stein, executive director of South Ottawa Community Legal Services, which offers benefits advice to clients. "It's a good thing."

But as the number of recipients increases, so could the number of fraud cases.

Complicated rules, random audits

The number of Ontario Works cases in the province has been steadily rising for the past decade, and includes some 37,000 income support recipients in Ottawa. (Elise von Scheel/CBC News)

Welfare amounts vary: a single person receives about $700 monthly, while a family of five could be eligible for about $2,200. Every dollar a recipient earns over $200 per month reduces their benefits by 50 cents, so someone working a low-paying job could quickly have their assistance slashed by half.

"The benefits programs are complicated, they're hard for people to understand the rules. Governments try to make the rules clearer, but there's still rules that are hard for people to often understand," Stein said.

Instances of fraud are discovered during random audits to which recipients consent when they apply fo Ontario Works benefits. If a recipient's financial situation has changed and they've fail to disclose it, it could mean trouble.

"If the city of Ottawa or the Government of Ontario thinks that the person purposefully withheld information … that runs the risk of leading to criminal fraud charges," Stein said.

When such fraud is discovered, the recipient is cut off and the case could be passed on to police, who can lay criminal charges.

On top of jail time, applicants convicted of fraud could be ordered to pay the money back and be declared permanently ineligible for future assistance.

In addition to random audits, McTiernan said the city's fraud tip line has been very active.

Province confident in prevention system

Despite the rise in welfare fraud in Ottawa, the province isn't hitting the panic button just yet.

"We are confident that the measures we have in place to support the integrity of our programs are doing a good job," said Graeme Dempster, a spokesperson for the Ontario Ministry of Community and Social Services.

McTiernan said the city is prepared to devote more staff to fraud investigation to deal with the rising workload.

"If we had a workload increase that we felt warranted an increase additional in resources we would certainly do so," she said.