The majority of universal credit fraud is through claimants saying they live alone when they share property with a partner, or failing to inform the DWP they are working.
ESA fraud rocketed, driven by people who are living abroad but still claiming handouts.
The rate of housing benefit fraud also increased sharply, with officials paying out £580m alone through claimants’ failure to declare earnings and employment.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance said: “The welfare system remains dogged by complexity and we can see the authorities are still losing significant sums of taxpayers’ money as a consequence. When people cheat the system, they are not just taking from taxpayers, they are also taking from the neediest in society. It is concerning to see the level of fraud still extremely high in some benefits, so there can be no room for complacency for ministers with still much more to do.”