He said the £26,000-a-year cap - the equivalent of the average wage - was "enormously popular", telling MPs an internal Government poll had found three in ten people affected by the new measure were now trying to find a job.
Speaking in the Commons, Mr Duncan Smith said: "It is my strong belief that there is a connection between what is happening with the benefit cap and getting people in to work.
"Poll findings that we have conducted show that of those notified or aware that they would be affected by the cap, three in ten then took action to find work.
"To date, Jobcentre Plus has helped some 16,500 potentially-capped claimants back in to work."
He added: "The reality is the benefit cap is enormously popular, which may account for the reason why (Labour) - the Welfare Party - have come and gone on this from the beginning. They say they are opposed to it, then they say they are for it. We have no idea what they will do about it."
The cap covers the main out-of-work benefits - Jobseeker's Allowance, Income Support, and Employment and Support Allowance - and other benefits such as Housing Benefit, Child Benefit and Child Tax Credit and Carer's Allowance.
It was initially piloted in four London boroughs last April and then rolled out across the rest of the country from July.
But critics say that it penalises out-of-work families in areas with high housing charges, forcing them to move out to cheaper areas.
Labour MP Glenda Jackson said the Government should look to introduce the "living wage" - which is higher than the minimum wage - if it wants to get more people in to work. She said Mr Duncan Smith had to "drop the mantra of making work pay".