Welfare crackdowns coming to mend the budget

THE Turnbull government will claw back almost $2 billion for its budget bottom line in a compliance crackdown targeting welfare cheats.

Treasurer Scott Morrison unveiled the saving - the biggest single measure in more than $4 billion of savings and revenue raisers - in his mid-year budget update on Tuesday.

The program will start in July and target welfare recipients who have misreported or fudged their income claims to the tax office between 2010-11 and 2014-15.

It is forecast to reap about $2 billion over four years by matching data from the tax office, Centrelink and employer tax declarations.

An extra $441 million will reportedly be saved in childcare subsidies and the government also expects a further $930 million windfall from a crackdown on family day care centres.

While the government plans to spend a further $1.3 billion on a new childcare package, that program is dependant on more budget cuts to help pay for it.

The government will also re-define parental leave payments as "income", in a bid to raise a further $105 million over the four years.