The number of people I can think of right now that I've known reasonably well and who I've known to be claiming benefits of some kind is probably in single figures. However, I can think of at least 2 or 3 of those, whose claims I wouldn't necessarily say were "fraudulent" but definitely would describe as questionable, or resulting in the money supporting things that I don't think the benefits system is really intended to support. Additionally, I've had people suggest to me that I should try and claim certain benefits that I don't feel are intended for me, or that would involve a little bit of bending of the truth on my part.
I think that the government bears some culpability for this, too, though.
As can be seen from the countless ATOS stories, people with clearly legitimate claims are being disadvantaged at assessment by the methods and processes used, and - unless someone is going to make a case that the appeal tribunals' stratospheric rate of upheld appeals is somehow flawed - clearly erroneous. That can have two effects: first, the "savvy" honest claimant realises that he/she is going to have to up the ante a bit in terms of how badly affected they are by their illness/disability, to account for the tendency of ATOS/DWP to discount their claims; and secondly, in so doing, to blur the moral distinction between a "legitimate" claim and a dodgy one.
The DWP is, in effect, gaming its own system to prevent having to pay out benefits that are, by its own rules, legitimately due. If we are to tolerate that behaviour, can we be surprised if people choose to game the system themselves in order to claim benefits that may not, by the DWP's own rules, be legitimately due, but which it becomes easier to justify as in some way "morally" due owing to the fact that the system is so clearly biased?
I am not saying that this excuses people who are attempting to commit outright fraud, but I think it is an inevitable consequence of the way the government is operating the system, and legislating to make it ever more byzantine and complex, that more and more people will take advantage of that very complexity to derive benefit from it they are not necessarily entitled to.