Greece has stopped various benefits, including pensions, to 200,000 people who lied to get their monthly cheques or were in fact dead, a Greek Labour Ministry official said on Wednesday.
The number is roughly 2 percent of the Greek population.
Debt-laden Athens discovered the fraud after beginning basic data cross checks and means-testing, under pressure from its international lenders to cut its deficits.
The government terminated payments to families that continued to receive the pensions of their dead seniors. It also stopped benefits to wealthy recipients who had posed as poor to become eligible.
They were caught during the inquiry and the state is reclaiming the money they have illegally taken, the Labour Ministry official said on condition of anonymity.
The cuts, implemented gradually since September last year, will generate savings of up to 800 million euros (658.42 million pounds) annually, the official said.
Greece has already slashed pensions by an average 25 percent to balance the books of its ailing state-run social security system, outraging pensioners and fuelling deep discontent with the EU/IMF bailout's austerity policies.
With nearly one-quarter of the 11 million population retired, pension payments are a major burden on state coffers.
Greece's generous welfare state and bloated public sector have been blamed as root causes behind a debt load that is about 1.6 times the country's economic output.
Efforts to shore up the pension system are being hampered, however, by austerity-fuelled unemployment which has climbed to a record level of nearly 22 percent.
(Reporting by Angeliki Koutantou; writing by Harry Papachristou. Editing by Jeremy Gaunt.)