The Work and Pensions Secretary has called on Scotland's First Minister to explain how the country would meet its welfare bill if it became independent.
Iain Duncan Smith has said that North Sea oil and gas revenues would not meet the costs of welfare spending which is 6% higher in Scotland.
First Minister Alex Salmond then branded Mr Duncan Smith's claims "offensive, nonsensical rubbish" and said he got his figures wrong.
But speaking at the Welfare to Work Scotland 2012 conference in Glasgow, Mr Duncan Smith said that Scotland is better off as part of the Union.
"I simply make the point to Alex Salmond and his team that they cannot simply keep spending that money. They have to answer the question if it doesn't cover it, and it doesn't, how do they find that money?
"The fact that the UK population is ageing and that Scotland's population is ageing faster than the rest of UK is also an imperative for the debate about welfare spending.
"The gap between what is paid in Scotland for welfare and pensions needs to be met because you can't meet it from those revenues that he talks about constantly from North Sea oil."
Mr Duncan Smith made his speech after Mr Salmond told BBC News: "We contribute 9.6% of the UK's taxation, with 9.3% of the spending and just over 8% of the population. That is a relative surplus of about £2.7 billion in 2010-11, or £500 for every man, woman and child in the country.
"The welfare bill is not financed out of North Sea oil, it is financed out of general taxation."
