Over 80 companies have been "red flagged" for allegedly abusing the JobBridge scheme. Under the scheme, unemployed people are offered an internship of six or nine months with a host company with a view to getting back into the workforce. During this time they receive their social welfare benefits and an extra €50 per week.
However, critics have claimed the scheme has been used by some firms to get cheap labour.
In a briefing for TDs, the Department of Social Protection said 84 organisations had been "red flagged" for breaching the terms of the scheme since it was introduced in 2011. This meant they were excluded from the scheme for a period of time. There are currently 34 companies on the "red flag" list, it said.
Host companies must agree not to use interns to replace paid employees who were made redundant. There also has to be a cooling-off period before a company can take on a new intern under the scheme unless the previous intern secured permanent employment.
Reasons for excluding companies from the scheme included a failure by them to put a standard agreement in place with the intern, non-compliance with monitoring checks, giving the intern duties which were not advertised, as well as poor or non-existent mentoring.
The department said many of the breaches were found during random monitoring visits by officials, while others were investigated in response to complaints.
Since its inception, the scheme has been used by 17,000 companies and 40,000 unemployed jobseekers have gone on internships. The department said 36pc of these had secured a job immediately after their placement while 60pc had done so within five months.