The government has published its first ever estimates for the proportion of foreign-born people who are claiming working-age benefits in the UK.
It found that 371,000 migrants made claims last year, the vast majority of which were legitimate.
The research suggests workers born abroad may be less likely to claim benefits than UK nationals.
A sampling exercise found 2% may not have rights to benefits - but the government could not say for certain.
Before the coalition government came to power the nationality of benefit claimants was not recorded.
The government has now tried to link records on benefits, border control and tax for those who came to work, study or visit.
- As of February 2011, there were 5.5m people were receiving working-age benefits. Some 371,000 of those were foreign nationals when they first came to the UK, representing 6.4% of the claimants.
- Almost 17% of all British nationals receive these benefits compared with almost 7% of all those classed as non-UK nationals when they first arrived in the UK.
- More than half of those receiving a benefit had in fact at some point become British citizens, meaning they had the same rights as people born British.
Working-age benefits include jobseeker's allowance, income support, carer's allowance and disability living allowance.
A follow-up sample by the DWP looked at 9,000 people who had come to the UK from outside of Europe. It found that 98% of them could claim working-age benefits because of their legitimate ties to the UK.
Approximately 125 people were thought to have no right to claim benefits - but the DWP report stressed there would need to be further investigations because people could have made valid claims before later losing their right to be in the UK.
Employment Minister Chris Grayling denied that the report was scaremongering and said the full picture was not clear. He said the study showed the vast majority of foreign-born nationals who claimed benefits were entitled to them.
"I think it's really important for the credibility of our benefits system... that we should understand the mix of people who come from other countries who are claiming benefits," he told BBC Radio 4's Today programme.
"We are now going to go through all the people who we've not being able to identify and we're going to repeat that exercise across the full 250,000 to have a system in which people can have confidence."
The employment minister said he wanted to reduce net migration and ensure the UK system did not attract "benefit tourists".
But Scott Blinder of Oxford University's Migration Observatory, an expert study group, said: "It's perfectly reasonable for the Government to want to understand the interaction between immigration and the benefits system, but the way this has been reported has been problematic and significantly misleading for two reasons.
"Firstly, it has been publicised in manner that has created the impression that migrants are particularly likely to claim benefits, when even the report itself clearly identifies that migrants are substantially less likely to claim benefits that the UK-born population.
"Secondly, the report lumps together all "migrants" including British citizens who were born abroad - and who clearly have the same rights to benefits as all other British citizens - and migrants who have no legal claim to be in the UK at all."