Certainly there are people who "conspire" to do bad things. Sometimes the "conspiracy" is one guy. Sometimes it's a small group. The only thing I can say with absolutely certainty is that the system will be gamed. How much depends on data that you're just not going to find.
Someone who is creative and fastidious about saving, reusing and recycling would, to your eyes, look like a welfare fraud because they might superficially seem better off then you think they should.
There are enough anecdotes (I could supply a few) to suspect there is a welfare abuse problem - we just don't know the extent of it, as numbers are hard to come by (for reasons explained by the poster you criticize).
Stating the fact that _some_ people take advantage of the system does not make one a heartless bastard.
It's anecdote because there's no data. There's no data because who'd admit to cheating the system? There's no cause for investigation due to compartmentalization-- none of their intended social circle knows they're on welfare; any that do are also on welfare and doing the same thing.
How would I, a "technocrat" making about six figures know this? Because a couple times in my life I've had to take advantage of this safety net. And I was always irritated at how people I'd seen entering and leaving the welfare office had so much material crap that I couldn't afford when I'd see them again out in public. There were several occasions where some of these welfare recipients were running businesses and hired me to perform computer repair, then in the offices I'd here them on the phone discussing with others how to game a particular part of the system. Disheartening.
You want /data/ on this? Good luck.