New research suggests welfare fraudsters face a tougher time than tax evaders, even though tax evasion costs taxpayers three times more.

A Victoria University study shows tax discrepancies cost the Government $1.24 billion in 2014, while welfare fraud cost the Government $30.6 million.

However, tax evaders are far less likely to be investigated, prosecuted or imprisoned, and far more likely to have debts written off.

Associate Professor Lisa Marriott said judges tend to denounce blue-collar criminals for the "seriousness" of their offending and recognise the "good character" of white-collar offenders.

Advertisement

"You tend to see a lot more excuses made for white-collar crime. You tend to see language which is a lot harsher associated with welfare fraud."

The study found the cost of debt recovery was $2.86 for every $100 of tax recovered, and $17 for every $100 of welfare payments recovered.

It also found between 800 and 1000 people were prosecuted for welfare fraud every year, while only 60 to 80 people were prosecuted for some form of tax fraud.

Ms Marriott said even tax fraud and welfare fraud cases involving the same amount of money were treated differently under the law.