The Department for Work and Pensions has admitted using made-up stories from fictional claimants to demonstrate the positive impact of benefit sanctions.
A DWP leaflet featured one welfare claimant, "Sarah", who said she was "really pleased" a cut to her benefits had encouraged her to improve her CV.
But after a Freedom of Information request by website Welfare Weekly, the DWP said they were not real claimants.
The stories were for "illustrative purposes only", it added.
Under the sanctions system - introduced by Work and Pensions Secretary Iain Duncan Smith - people can lose benefits for anywhere between a few weeks and three years if they fail to meet the government's requirements for jobseekers.
Stephen Timms, Labour's acting shadow work and pensions secretary, said: "You couldn't make it up - but it seems Iain Duncan Smith can. The only way he can find backers for his sanctions regime is by inventing them."
The leaflet features the apparent stories of two sickness benefit claimants, Sarah and Zac.
"Sarah" - whose story features alongside a woman's picture - says she failed to complete a CV despite agreeing to do so on her work "action plan".
"I didn't have a good reason for not doing it and I was told I'd lose some of my payment. I decided to complete the CV and told my work coach," she says.
Sarah says her benefits were cut for two weeks, but now she is "really pleased with how my CV looks" and it will really help her find a job.
Zac, meanwhile, says he let his work coach know when he was going to miss a meeting and because he did so, "my benefit payment hasn't changed".
According to Welfare Weekly, the response to its Freedom of Information request from the DWP said the images used were "stock photos and along with the names do not belong to real claimants".
The DWP later said in a statement: "The case studies were used for illustrative purposes to help people understand how the benefit system works. They're based on conversations our staff have had with claimants.
"They have now been removed to avoid confusion".
The system of benefits sanctions - introduced under the coalition government - has been accused of having a detrimental impact on some claimants.
Earlier this year, the Commons Work and Pensions Select Committee called for an independent inquiry into the way the sanctions were applied, saying that in some cases they were causing food poverty and "severe financial hardship".
Mr Timms added: "Instead of fabricating quotes pretending the system is working, [Iain Duncan Smith] should scrap unfair sanctions targets for jobcentre staff and do more to protect vulnerable people from facing benefit sanctions."
Learning disability charity Mencap accused the DWP of "unacceptable" behaviour and of misleading the public by giving them "an unrepresentative view of the sanctions regime and its impact on disabled people".