Welfare cheats give everyone legitimately receiving assistance a bad name, says Opposition Leader Bill Shorten.
Mr Shorten was responding to reports that the Abbott government intends to appoint a senior federal police officer to crack down on welfare fraud.
Human Services Minister Marise Payne says the task force will focus on recovering money from those on income support payments like Newstart, Youth Allowance and pensions who have underestimated or lied about their income.
The government estimates the task force will recoup about $1 billion.
"This measure will allow the department to uncover overpayments, recoup debts and investigate deliberate welfare fraud," Ms Payne said.
Mr Shorten said Labor will carefully consider measures to improve compliance because the party has no time for anyone defrauding the system.
"It is illegal to do this," he told reporters in Ballarat on Sunday.
"But ... if we are talking about making sure that the AFP has a role here, government needs to explain why they are cutting the number of AFP officers by 115."
Greens senator Rachel Siewert said the government is deliberately trying to smear all income support recipients with this latest "tough cop on the beat" approach to welfare.
She said appointing a senior police officer to target welfare fraud implies the problems are related to deliberate fraud rather than administrative errors resulting from a complex and unwieldy system.
"Government should be pursuing with the same vigour those at the big end of town who are deliberately avoiding paying tax," Senator Siewert said in a statement.
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