Identity thieves stole £2.7m from the online tax credits system, the government admitted last week.
In a statement to parliament, paymaster general Dawn Primarolo said the government estimated that the identities of 8,800 Department for Work and Pensions staff may have been stolen in 2003-2004, and that of these 6,800 had been used in an attempt to defraud the tax credits system in autumn 2005.
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"Of the 6,800 fraudulent claims, about 4,100 were fully intercepted by HM Revenue and Customs before any payment was made. Of the remaining 2,700 claims - where tax credit payments were made into multiple bank accounts using the stolen identities - payments were suspended immediately after they were discovered, and all payments were suspended by 16 December 2005," she said.
"Swift action addressed the risk of higher losses, limiting the loss from this fraud to an estimated £2.7m."
Earlier estimates suggested that 13,000 DWP staff identities had been stolen, with fraud losses amounting to £15m.
Primarolo also said investigation into the theft of Network Rail employees' identities resulted in at least 16,000 claims being stopped. Last week Network Rail wrote to 30,000 staff to allay fears about identity theft.
Last year the Pre-Budget Report stated that HMRC would double the number of pre-payment checks carried out on new claims.
Primarolo said HMRC had offered the banking sector and other financial institutions its help and expertise in detecting identity fraud and ensuring that sufficient checks were in place to prevent fraudsters from opening bank accounts using stolen identities.
Tax credits applications require the individual to provide their name, address, date of birth, national insurance number, phone number, benefits number or employment details, PAYE tax reference, payroll number and employers' tax office. Self-employed claimants must give their tax reference number.
Savings and strike threats at DWP, p16