Benefit cheats are to face increased prison sentences of up to 10 years, under new guidelines set out by the director of public prosecutions.
Keir Starmer QC said it was time for a "tough stance" on benefit and tax credit fraud, as he issued the guidance for prosecutors in England and Wales.
He said the £1.9bn annual cost of the crime to the nation should always be at the "forefront of lawyers" minds.
It was a myth "getting one over" on the system was a victimless crime, he said.
Cash limitThe move comes after the Crown Prosecution Service (CPS) merged with the Department for Work and Pensions' prosecutions division last year.
The guidelines set out the approach prosecutors should take in deciding which offences to use, so that the charge fits the crime.
Suspects can now be charged under the Fraud Act, which carries a maximum sentence of 10 years, according to the CPS.
In the past, benefits cheats were commonly charged under social security legislation carrying a maximum sentence of seven years.
And benefit frauds of less than £20,000 were automatically tried in magistrates' courts, which could only sentence people to up to 12 months imprisonment.
This financial threshold has been scrapped under the new guidelines, so smaller cases can be referred straight to crown courts for tougher sentencing.
The BBC's legal correspondent Clive Coleman said the changes meant welfare cheating would now be classed alongside offences such as money laundering and banking fraud.
'Most vulnerable'Mr Starmer said: "It is a myth that 'getting one over on the system' is a victimless crime: the truth is we all pay the price. But it's not only the taxpayers that suffer.
"Benefits exist to protect and support the most vulnerable people in our society and, whenever the system is defrauded, it's also taking money away from those with a genuine need."
Earlier this year, MPs on the Communities and Local Government Select Committee called on the government to give a "swift assurance" that the introduction of its new welfare system, known as Universal Credit, would not cause a rise in benefit fraud.
Universal Credit will eventually replace six key means-tested benefits with one payment.
Last year, the CPS saw more than 8,600 prosecutions in benefit and tax credit cases, and 4,000 in the first five months of 2013, Mr Starmer said. The current conviction rate is 89.7%, he added.
The government has claimed to have saved hundreds of millions of pounds by introducing better fraud prevention and reducing errors in the tax and benefit system.
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