More than 8,000 applications by firms to the new Covid youth jobs scheme are "verging on fraudulent", a Cabinet minister has revealed.
Therese Coffey told MPs one in seven of the 60,000 applications to the Kickstart scheme since August have come under suspicion.
The scheme will offer six-month work placements to people aged 16 to 24 who are on Universal Credit.
But it could be a big earner for firms - because they get a £1,000 fee and won’t have to top up any of the youngster’s wages.
When the scheme launched, firms were warned they must show the jobs are "new", do "not replace existing jobs", and are "above and beyond any jobs they were expecting to create."
But the Work and Pensions Secretary told MPs: "It’s important we take our time to be thorough.
“Because we’ve already estimated that unfortunately, we think about one in seven applications have been frankly verging on fraudulent.
“And we need to be careful in that, which is why we’ve gone through a very systematic process in making sure these are legitimate businesses, legitimate organisations, and they are additional roles.”
Under the scheme, the government funds 25 hours of minimum wage per week - but there is no way of forcing firms to pay more.
The minister said “well over 60,000 vacancies” have been offered by firms already, and are currently being vetted.
Ms Coffey was quizzed as MPs heard 6million people are now on Universal Credit - double the number before the pandemic.
She revealed she is in “active discussion with the Treasury" about carrying on a £20-a-week boost to Universal Credit beyond April 2021.
More than 50 charities and campaigners have warned ending the one-year rise, as planned, would hurl 700,000 more people into poverty.
And committee chairman Stephen Timms said it would be "inconceivable to cut everybody’s benefit before the pandemic is over”.
Ms Coffey refused to pledge the rise will stay - and has refused to extend it to more than a million other benefit claimants, mostly disabled.
But she said “I do worry” about people’s financial resilience and debt. She added: “That’s part of what’s driving me in my considerations as we go forward with potential further measures."
Ms Coffey also hinted she could extend a coronavirus rule that allows loss-making self-employed people to claim benefits.
Usually the level of Universal Credit the self-employed can claim is capped, under a policy called the Minimum Income Floor.
The MIF was suspended due to Covid-19 but is currently due to return on November 12. Ms Coffey said: “This policy is very actively being considered”.
The Commons Work and Pensions Committee heard there are now 35,000 to 40,000 new UC claims per week, a return to normal levels.
But 4,500 new work coaches - originally promised “by October” - will start in the first week of November as overall claims soar.
"We are planning for a potential rise in unemployment," Ms Coffey said. "That's why we are doubling the number of work coaches, increasing the number of decision-makers, expanding the number of sites in order to help more people who may need our help."
Ms Coffey admitted efforts to find more Jobcentre space were “going slower than I hoped”.
The Tory minister also refused to promise a long-awaited Green Paper on reforming disability benefit tests will come before Christmas.
“I’m going to try to do my best to get it out before the end of the year”, she told MPs - adding she expected it before April 2021.
Despite this, she revealed she is in talks about how to reintroduce “a limited number” of face-to-face disability benefit assessments.
Ms Coffey said disabled people who are unfairly dumped by firms during the pandemic should resort to an employment tribunal.
Asked how they could be helped, she replied: “Clearly if people think they have been discriminated against they can of course go to an employment tribunal to challenge their redundancy or dismissal. That’s an important part of our overall legislation in making sure people are not discriminated against in that regard.”
