In the field of welfare attitude research, generally studies examining critical attitudes toward the welfare state are rather limited. However, the existing studies find that people are most negative about the mis-targeting of welfare benefits – that is, people are particularly critical of the high overuse (misuse or fraud) and high underuse (non-take-up) of welfare benefits. This study contributes to the current literature by more extensively analyzing perceptions of the overuse and underuse of welfare benefits by revealing the underlying perceptions of moral failure or failed administrative implementation. We also assess how different individual- and contextual-level factors influence those perceptions. We use data from the European Social Survey 2008/2009 for 25 European countries. We find that instead of representing two manifestations of the same concept of mis-targeting, perceptions of the overuse and underuse of benefits appear to be driven by normative ideas and opinions about the administrative effectiveness of the welfare state. Whereas normative ideas about the overuse of benefits are mainly influenced by people’s political ideology and the selectivity of the redistribution system, ideas about the effectiveness of benefits are mainly influenced by people’s institutional trust, the quality of the welfare state and the economic context. We conclude that critical attitudes toward the welfare state have multiple dimensions and can be both substantive and procedural in nature.