The Minister for Social and Family Affairs says there is evidence in some border towns that numbers claiming dole exceed the 2006 census recorded population for the area.
One such case is Ballyconnell in Co Cavan where the total population in the 2006 census was 747 and the number of people claiming social welfare payments in recent months reached 1,044.
The Minister says many of the people claim they are living here.
Inspectors and staff at the Department are now engaged in a determined campaign to target fraudulent claimants.
In Co Donegal, the town of Ballybofey has seen an increase of 123% which is well in excess of the national average of 80%.
The Minister says there is evidence of car loads of people coming south to claim payments and then returning to Northern Ireland.
In particular, Ms Hanafin says there is an issue with men under 25 years of age.
