Second Minister for Finance Lim Hwee Hua said that before the wage subsidy is given to employers, their records with the Central Provident Fund are checked for any unusual or significant rises in CPF contributions.

If any show up, 'the Government will conduct verifications and, if necessary, will withhold payment until verifications are completed', she said in Parliament on Friday.

Selective audits will also be conducted, and if fake claims are uncovered, employers will be disqualified from Jobs Credit payments and will face legal prosecution, she added.

Mrs Lim was responding to Mr Seah Kian Peng (Marine Parade GRC), who wanted to know if there was a system in place to prevent abuse by companies that lie about the number of local workers they hire.

The $4.5 billion Jobs Credit scheme pays for part of a local worker's salary, with the aim of helping companies cut costs and save jobs.

However, some companies put 'phantom workers' on their payrolls by using the details of unemployed locals, mostly retirees. They cheat because they want to reduce costs by hiring more foreigners, who are normally paid less than local workers.

These companies use 'phantom workers' to try to get around the law that requires Singapore businesses to hire a specified number of Singaporeans or permanent residents before they can employ foreign workers.

Such scams are illegal and several companies are now being investigated for the offence, said Mrs Lim.

Read the full report in Saturday's edition of The Straits Times.