Welfare fraud crackdown to net $1.7bn

The federal government is set to reap more than $1 billion by catching welfare cheats.

The Department of Human Services will get added powers to detect fraud and recover debt with a package of new compliance measures announced in the federal budget.

The $1.7 billion in savings over five years will be used to fund new government policies.

The department is also getting $60 million for the first phase of replacing Centrelink's age-old computer system, which makes welfare payments to hundreds of thousands of Australians.

Those initial funds will be used for business planning, design work, and four unidentified projects to make accessing services easier.