The Prime Minister said the Chancellor's remarks about the Philpott case "were absolutely right".
He said: "I think what George Osborne said was absolutely right.
"He said that Mr Philpott was the one to blame for his crimes and he should be held responsible but what the Chancellor went on to say is we should ask some wider questions about our welfare system - how much it costs and the signals that it sends.
"We do want to make clear that welfare is there to help people who work hard, it shouldn't be there as a lifestyle choice and I think that's entirely legitimate."
Shadow Chancellor Ed Balls launched a scathing attack tonight on what he called the "cynical, nasty and divisive" way George Osborne linked the Philpott case with the broader issue of state benefits.
Mr Balls said the "desperate" Chancellor had offended millions of hard-working people and was playing politics with a tragic case for his own political gain.
The shadow chancellor Ed Balls has condemned the "nasty and divisive" comments by George Osborne in which he questions why taxpayers' money was being used to "subsidise lifestyles" like Mick Philpott:
Where the ultimate blame should lay for the deaths of six of Mick Philpott's children is at the centre of fierce debate.
Editor and founder of the Guido Fawkes blog Paul Staines and Independent columnist Owen Jones amplified that debate on ITV's This Morning.
Paul Staines levelled the blame at the welfare state while Owen Jones said that was like blaming Harold Shipman on the NHS.
Labour MP for Middlesbrough Andy McDonald has accused George Osborne on Twitter of "trying to make capital" out of the Philpott case:
Chancellor George Osborne has said that the case of the Derby house fire raises questions about whether the Government and taxpayers should be "subsidising lifestyles like that".
Chancellor George Osborne has questioned why the taxpayer should pay for benefit "lifestyles" such as those of child killer Mick Philpott.
When asked on a visit to Derby if the Philpotts were a product of Britain's benefit system, Mr Osborne said: "It's right we ask questions as a Government, a society and as taxpayers, why we are subsidising lifestyles like these. It does need to be handled."
He said Philpott "was responsible for horrendous crimes, crimes which have shocked the nation".
Work and Pensions Secretary Iain Duncan Smith has said that housing benefit changes that have been introduced today are about "fairness".
In response to criticisms of the so-called 'bedroom tax', he said: "The reality is this is about getting our housing benefit back into order".
"This is about fairness. It's about fairness to those who pay vast sums of money in taxation to see that people living in subsidised accommodation who often don't use the bedrooms they've got, while others in overcrowded accommodation.... they can't get the accommodation they need.
"This is a nonsense problem that was created by the last government who didn't build enough housing and didn't manage the housing stock properly".
Today's rulings in the Cait Reilly and Jamie Wilson cases should mean the end of working without pay, according to the Public and Commercial Services (PCS) Union.
The Union said it welcomed the Court of Appeal judgement and agreed Ms Reilly was unlawfully forced to work for no wages.