Figures released by his department said some 155,000 people, either without permission to be in this country or who overstayed their permits, have been claiming Employment Support Allowance and maternity pay.
The DWP said that under existing rules no checks are made to see if claimants have leave to stay in the United Kingdom.
It has been warned by the European Commission that any changes in rules must not discriminate against immigrants from the European Union.
Mr Duncan Smith’s department also disclosed that at least 330,000 children live with a parent claiming Jobseekers’ Allowance.
“We know that family is the most important influence on a child’s life, so it is no surprise that with this many children growing up with parents on unemployment benefit we are facing inter-generational worklessness on such a massive scale”, he said.
