More than 5300 benefits costing $56 million a year have been cut off due to an information sharing arrangement between Inland Revenue and the Ministry of Social Development, the Government says.
From March, the agencies have compared data to identify beneficiaries who have not accurately reported their income to Work and Income.
The ministry can then correct the amount or type of benefit being paid and, if there is reason to believe the under-reporting was deliberate, investigate for possible welfare fraud.
Associate Social Development Minister Chester Borrows said there had been 5310 cancellations to date, as well as rate adjustments for a further 2995 benefits.
"While the vast majority of beneficiaries do the right thing and let us know about their circumstances it is disappointing to see that some people continue to break the law and take money they're not entitled to," he said.