Welfare cheats with millions of dollars in unexplained wealth that may be linked to money laundering, drug trafficking and even terrorism have been caught in the net of a Federal Government crackdown and ordered to pay back more than $40 million in Centrelink payments.

More than 1000 people nationally have been caught in a joint operation by the Department of Human Services and the Government’s financial intelligence agency Austrac, with more than $2 million paid in fraudulent claims in WA.

One Perth parent will have to repay more than $100,000 after investigators discovered $220,000 in unexplained income had not been declared to the department while she also claimed Centrelink benefits. Just $35,000 had been declared.

Human Services Minister Michael Keenan will release the figures today to highlight the success of a new data-matching operation that has saved taxpayers $17.8 million.

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Under the program, Austrac (Australian Transaction Reports and Analysis Centre) identifies suspicious transactions — such as large unexplained bank deposits — and reports them to the Department of Human Services, where they are cross-checked against records to determine if an overpayment has occurred.

Mr Keenan said that protecting the integrity of the welfare system was a priority for the Government, and that “no stone would be left unturned” to identify those abusing the system.

“This should serve as a wake-up call to those who think they can defraud Australian taxpayers,” Mr Keenan said.

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“Australia has a very generous welfare system and it needs to operate with integrity to ensure those who genuinely need our support receive it.

“But for those that are defrauding the system, you will be caught, you will be forced to repay that money and you will face significant consequences.”

The average amount each welfare recipient was ordered to repay was $43,000, with most of the money being fraudulently claimed in Victoria ($21 million).

NSW had the second-highest amount of fraud ($15.5 million), with WA and Queensland on $2.2 million and $2.4 million respectively.