Iain Duncan Smith's department faces renewed mockery over its universal credit "fiasco" after it emerged the cost of the reform could increase by up to £750 million.
Labour said a parliamentary question tabled in March confirmed the government's failure to take into account the cost of free school meals was likely to increase the bill.
The Department for Work and Pensions (DWP) says it has liaised with the Department for Education over how new eligibility criteria for free school meals will work.
At present those families who receive benefits like income support become eligible for free school meals.
With agreement yet to be reached the government has previously indicated it will make free school means available to all those on universal credit.
"Ministers have ignored warnings about universal credit and free school meals for years," shadow welfare reform minister Chris Bryant said.
"Now they have admitted the cost of their incompetence could reach £750 million.
"David Cameron must to urgently get a grip of this latest universal credit fiasco with threatens to cost taxpayers millions of pounds."
The DWP argues it is unlikely that all those who receive universal credit will end up receiving free school meals, however.