WELFARE fraud uncovered by the Government amounted to $2.7 million last year, double the amount stolen in the previous year but still a tiny fraction of spending. The figure's release prompted criticism that the Government's plan to spend $40 million on catching welfare cheats by hiring 200 more investigators is an overreaction. The Social Welfare Department revealed yesterday that 88 cases of fraud and $2.7 million of cheated money had been uncovered in the 1998-99 financial year. In the past three years, the amount of welfare money stolen had doubled every year. In 1997-98, 57 cases and $1.4 million were uncovered. In the 1996-97 year, 17 cases and $670,000 were found. The department plans to spend $40 million on hiring 200 more welfare officers this year to search for more cases of fraud - which tend to involve people failing to disclose income or assets, falsifying rent receipts or claiming a divorce or separation from their spouse so they can get benefits. But Ho Hei-wah, an advocate for low-income families and director of the Society for Community Organisation, said the department's strategy was a 'big waste of money'. 'The administrative cost is greater than the money cheated,' Mr Ho said. Last year's 88 cases were just .038 per cent of the total caseload of 230,000 cases. And the amount lost, $2.7 million, was just a fraction of the $13 billion total spent on welfare for the poor, elderly and disabled, he said. Li Kok-ming, the department's chief social security officer, acknowledged that fraud cases and the amounts were small but said the rapid rise in fraud required immediate action. 'The real purpose of welfare is to help people who really need it,' Mr Li said. 'We need to step up investigations and public awareness that cheating on welfare is a serious offence.' Mr Li said the additional staff would allow the department to conduct more family visits - often the only way to find evidence of welfare cheating. Every new applicant would be paid a visit at home and more elderly applicants would be selected for home visits. Officers would focus on people whose financial situations could easily change, such as the unemployed. 'What we often come across is people who were unemployed when they first started receiving welfare, but later got a job and failed to report their income, continuing to rake in welfare money,' said Ng Yiu-hing of the department's special investigation team. Welfare officials also planned to work more closely with other departments, such as the Inland Revenue Services Department, in order to share information in the hope of finding evidence of cheating. Neighbours and others are urged to report suspected welfare fraud cases by calling 2332-0101.