Repeat benefit cheats will have their welfare payments halted for up to three years as part of a tough new crackdown announced by Chancellor George Osborne.
And the Chancellor said that every wrongful claim for benefits - including avoidable errors made when filling out forms - will in future be punished by a £50 fine.
Comparing the cheats to muggers robbing taxpayers of their hard-earned money, Mr Osborne said Britain "can't afford to waste any more time" in reducing a £5 billion annual bill for fraud and error in the benefit and tax credit system.
The new crackdown, to be formally launched tomorrow, will include mobile hit squads of inspectors being sent to areas where the problem is rife. A "three-strikes-and-you're-out" rule will strip repeat offenders of benefits for up to three years.
And some 200 additional inspectors are to be recruited to a new investigation service, which will detect the patterns of fraudulent activities by looking at shared data from government offices and credit reference agencies.
Investigators will also aim to seize more of the assets of those found guilty of benefit fraud.
Mr Osborne told BBC1's Andrew Marr Show that the tough new rules were "perfectly reasonable", adding: "We have a benefits system. I want it to be on a sustainable footing for the long term, but it has to go to the people who need it, because the people who pay for it demand no less."
The Chancellor has said that bringing down the welfare bill will play a crucial role in easing the impact of state spending cuts as he tries to pay down Britain's structural deficit over the coming four years.
Fraud in the benefit and tax credit system is estimated to cost the taxpayer around £1.5 billion a year, while a further £3.5 billion is accounted for by errors by officials or claimants.
Mr Osborne told the News of the World: "This is a fight. We are really going to go after the welfare cheats."